Central Bank of Russia left its rates unchanged at 11% in last Friday's meeting. This is widely expected by the markets, hence RUB exchange rates did not do a lot after the meeting.
CBR mentioned its intention to cut rates in upcoming meetings, given there is decline in the inflation rates, which will happen anyway over coming months because of base effects of last year.
The increases in CPI compared to previous month are still at the upper end of the central bank's expectations, in the absence of severe drop in inflation prints, the implication is that any rate cut cycle will be a mild one.
"Considering the wider concerns of plummeting oil prices along with Fed monetary policy normalization, this is a reasonable assumption. The bottom line for investors is that we are more likely to see higher prices in USD/RUB than lower ones in the short term", says Commerzbank in a research note.
Currently RUB is trading at 70.26 against USD, while it is trading at 76.82 against EUR.
