The Russian central bank’s 50bp interest rate cut to 9.25% today was larger than most (but not us) expected and, taken together with the relatively dovish tone of the statement, supports our view that the policy rate will come down much further than the markets are pricing in. As things stand, we see the key rate being lowered to 8.00% by the end of this year and to 6.00% by the end of 2018.
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