Decline in inflation likely to support further CBR rates cuts

The stabilisation of financial markets in Russia is leading to a rapid decline in inflation, which has been running at a rate of about 8% per annum in April-May 2015.

This has caused the CBR to cut rates aggressively from a peak of 17% in December 2014 to 12.5% currently. 

With the RUB appreciation already in place, further deceleration of inflation is possible. This will support further CBR rates cuts this year and next. 

"We think the CBR policy rate will be below 10% at end-2015." says Barclays Capital