Russian central bank meets Friday, 3rd February to decide policy rate. The central bank is widely expected to maintain its interest rate at 10 percent. Russia's macroeconomic policy has been more stable and stronger after Brexit vote and Donald Trump’s victory in the U.S. Presidential election in 2016.

Russia's inflation rose 5.4 percent y/y in December, the low for the cycle but still higher than the central bank’s 4 percent target. Russian economy ministry noted in its weekly report that the country's annual inflation is expected to hover between 5-5.2 percent in January, 2017.  Also, the ministry added that consumer inflation is set to grow 0.6-0.8 percent m/m in the first month of January, eroding further chances for a rate cut from the central bank.

Following moderately tight monetary policy, the regulator foresees that the country’s annual consumer inflation is highly likely to decline below 4.5 percent by October, 2017, reaching near to the CBR target of 4 percent.

Central Bank of Russia (CBR) last week announced the launch of dollar purchases in conjunction with Russia's FinMin to shield the economy from oil swings. The aim is to increase the stability and predictability of internal economic conditions and to lower the impact of the volatile energy market on the Russian economy and public finances, the CBR said.

An economic recovery and low inflation mean the Russian central bank could ease monetary policy, but there are risks from hurried decisions on cutting rates, central bank official Igor Dmitriev said last week. At its first monetary policy meeting for 2017, CBR is widely expected to maintain interest rate at 10 percent as the country’s inflation remained a bigger concern.