Russian central bank likely to continue cutting rates through 2018

The Central Bank or Russia has been lowering rates steadily and is likely to carry on with cutting rates through 2018, noted Commerzbank in a research report. There was a slight question mark raised by ‘super-strong’ January manufacturing data, which indicated output rising by far better-than-expected 2.9 percent year-on-year.

However, it turns out that this was not a miracle economic rebound. Economy ministry of Russia has explained that this reading was stimulated by one off factors, related especially to the increase in production by the new Yamal LNG facility.

Keeping that aside, growth is expected to have continued at roughly prior month rates. The impact might influence output for a few more months too; however, the addition of a new production base is note a reason why the Russian central bank would change its  monetary policy stance towards less dovish. In all, the data are FX-neutral here as well, added Commerzbank.

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