28 Apr 2016
Russia: Central bank to remain on hold on Friday - TDS
According to analysts from TDS, the Central Bank of Russia (CBR) will leave rates unchanged tomorrow but rate cuts are not far off. Regarding the RUB, they expect an appreciation over the course of the year.
Key Quotes:
“At tomorrow’s (29 April) Board meeting we expect the CBR to keep its Key Rate on hold at 11.0%. This in line with the consensus expectation.”
“We think that the CBR will start cutting at the June Board meeting and that the Key Rate will be lowered by a total of 100 bps this year. That said, we would not rule out the possibility of the CBR cutting tomorrow.”
“While the continuing cautious stance of the CBR will help support the ruble, we continue to see oil prices as being the main driver of USDRUB. TD’s commodity analysts have already turned more positive on the outlook for oil this year, as they expect production to fall and do not believe that Iran will flood the market. They are forecasting Brent at $60pb by Q4 of this year. If the past relationship between USDRUB and oil is maintained, this would imply USDRUB at around 57.0, but we cautiously forecast 59.5 taking into account the marginally negative impact of declining rate differentials to the US.”
Key Quotes:
“At tomorrow’s (29 April) Board meeting we expect the CBR to keep its Key Rate on hold at 11.0%. This in line with the consensus expectation.”
“We think that the CBR will start cutting at the June Board meeting and that the Key Rate will be lowered by a total of 100 bps this year. That said, we would not rule out the possibility of the CBR cutting tomorrow.”
“While the continuing cautious stance of the CBR will help support the ruble, we continue to see oil prices as being the main driver of USDRUB. TD’s commodity analysts have already turned more positive on the outlook for oil this year, as they expect production to fall and do not believe that Iran will flood the market. They are forecasting Brent at $60pb by Q4 of this year. If the past relationship between USDRUB and oil is maintained, this would imply USDRUB at around 57.0, but we cautiously forecast 59.5 taking into account the marginally negative impact of declining rate differentials to the US.”