Rub: A planned 200pb cut, there is still more to come – Commerzbank

The Russian Central Bank (CBR) cut its policy rate at 200 basic points up to 18.0% last Friday, complying with market expectations. This movement followed recent uninflationary developments where the seasonally adjusted annational inflation rate has already reached 4% of the CBR. However, despite the slowdown in inflation, the CBR maintained a neutral tone and pointed out persistent risks in favor of inflation due to high inflation expectations, a adjusted labor market and weaker exchange terms. Governor Elvira Nabiullina reinforced this cautious posture in her press conference: she emphasized that the risk balance still indicates that inflation exceeds the goal and pointed out that the recent deflation should not be over -intertwined: current inflation remains above the objective in interannual terms (9.2% a/a); It considers that the recent softness in inflation is due to temporary factors, including price adjustments in some volatile categories, says CommerzBank’s currency analyst Tatha Ghose.

Rub has barely moved

“Regarding the guidance on rates, Nabiullina warned that Friday’s movement does not necessarily mark the start of a relaxation cycle. While more cuts are possible, decisions will continue to depend on the data and can be delayed if the inflation risks will be reaffirmed. This, of course, is the routine speech of a central bank. We hope that the key rate is cut once again once again in the next Basic. For the rest of the year. “

“Even so, GDP and consumption projections were left unchanged, and external assumptions deteriorated. The lowest oil prices and a decrease current account surplus are now incorporated into the perspectives of the CBR. There is a perception that the ruble has been seen strongly in the last quarter, but this would be a misinterpretation: we are simply observing the weakness of the USD. “

“Against any important currency other than the USD, for example, the euro, the ruble had a good month in February 2025 when the US president Trump made clear his pro-russia position and arose optimism with respect to the end of the war and the possible elimination of some severe sanctions. Apart from that recovery, the ruble has been quoting lateral Friday;