MNI CBRT Review - Dec'25: Faster Easing Not Too Surprising

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Executive summary:

• The CBRT cut the one-week repo rate by 150bps to 38%, a slightly larger move than the 100bps that was expected.
• Officials pointed to an improvement in the underlying trend of inflation but also flagged familiar risks to the disinflation process.
• The Bank repeated its guidance that future decision will be made prudently on a meeting-by-meeting basis.

October’s policy statement highlighted that data had been pointing to a slowdown in disinflation – with a particular emphasis on the threat posed by food prices as well as pricing behaviour and inflation expectations – which ultimately warranted a slowdown in the easing pace to 100bps. While this month’s edition continues to flag the risk posed by the latter, it also notes that the “underlying trend of inflation declined slightly in October and November,” and that “consumer inflation was lower than expected” overall. 

Otherwise, the policy statement was nearly identical to October’s, with the step size of future moves to be reviewed “prudently on a meeting-by-meeting basis with a focus on the inflation outlook,” and the monetary policy stance to be tightened “in case of a significant deviation in inflation outlook from the interim targets”.