Mercouris nailed it.
As anticipated the Russian Central Bank has cut its key interest rate by 50 base points, bringing it down from 11% to 10.5%.
Whilst this is not in itself a significant reduction, it is a step forward especially as the Central Bank is signalling that it will cut interest rates further over the course of the year.
The interest rate cut has come with a revised inflation forecast. The Central Bank now anticipates inflation for 2016 to be in a range of 5 – 6% and below 5% in April 2017. It still expects inflation to fall to its target of 4% in the second half of 2017.Hellevig and Mercouris vindicated.
The Central Bank’s revised forecast for inflation this year is in line with what Jon Hellevig and I have been saying for some time.The rest of the post is important if you are following Russia and the ruble.
Russia Cuts Interest Rates