09:36 Mar. 17, 2016
Talking the talk of monetary easing doesn't mean the Bank of Russia is ready for an about-face on interest rates
While economists from Royal Bank of Scotland Plc and Nomura International Plc say the central bank's rhetoric will turn dovish this week, they differ over the timing of rate cuts after a halt since July.
In less dispute, though, is that the benchmark will remain at 11 percent for a fifth meeting on Friday (March 18). Only six of 41 analysts surveyed by Bloomberg predict a 50 basis-point decrease, with the rest seeing no change.
After a year of plunging oil prices fed currency crises in Russia and pushed the economy into its longest recession in two decades, the central bank is now all but certain to back off its warning in January that it may tighten monetary policy if risks to price growth intensify.
What's still giving Governor Elvira Nabiullina pause are elevated inflation expectations and the uncertainty roiling Russian fiscal policy. That means monetary loosening may be months off.
"The risks from easing policy at this stage most likely still outweigh the benefits," said Dmitri Petrov, an analyst at Nomura who predicts no change before a 50 basis-point cut in June. "We would expect the central bank to wait until there is greater confidence in both the inflation and inflation-expectations dynamics as well as some reduction in uncertainty about the currency."
The central bank will announce its decision at about 1:30 p.m. on Friday in Moscow, followed by Nabiullina's news conference. Policy makers will also issue updated forecasts.