CBR favouring RUB’s moderate weakening

At the previous meeting on 31 July, the CBR reiterated its CPI forecast for June 2016, stating that annual inflation will fall under 7% reaching the 4% target in 2017. 

"Upcoming price increases in Russia are expected to be more moderate than in early 2015, as the RUB devaluation has already been transferred to consumer prices", says Danske Bank. 

Its call is still seen on inflation as extremely dovish, supporting the further easing of monetary policy after September 2015. 

"Medium term, the CPI is expected to slow down and the CBR to resume its monetary easing, which has been badly needed", added Danske bank.