MNI CBR Preview - Feb'25: Another Hold as Lending Growth Slows
Executive Summary
- The CBR is expected to keep its key rate unchanged at 21% again this month given that inflationary pressures and lending dynamics have not developed in a way which would warrant a further tightening of monetary policy.
- However, communication from both the policy statement and post-decision press conference is likely to retain a hawkish bias.
- All surveyed analysts expect rates to be held at this juncture.
See the full preview, with a summary of sell-side analyst views, here:
Since the previous rate decision, headline inflation has continued to near on 10% (the sell-side median expectation for January CPI is +9.90% Y/Y, compared to +9.52% in December), suggesting that rates will need to remain on hold for a prolonged period, and that the hiking-bias will be retained in the policy statement. As per the CBR’s medium-term projections, inflation is forecast to average between 6.1-6.8% this year and is not expected to fall to the 4% target until 1H-2026. The key rate is expected to average between 17-20%.
Meanwhile, a recent report published by the CBR notes that while “seasonally adjusted growth rates of consumer prices remained elevated”, the current decline in credit activity and fiscal policy normalisation “will be gradually decelerating the increase in demand”.
