RUB: Dovish CBR and weaker flows point higher USD/RUB – Commerzbank

Commerzbank’s Tatha Ghose highlights that the Russian central bank cut rates by 50 bps and raised its 2026 inflation forecast, while still projecting significantly lower average rates by 2027. Alongside a sharply lower Oil price assumption and reduced current account surplus, the bank reiterates its expectation for USD/RUB to trend back toward 100.0 over coming quarters.

CBR easing bias and softer external backdrop

"The Russian central bank (CBR) cut its key rate by the symbolic 50bp on Friday, which was a scenario we envisaged in our preview."

"But, what was more interesting is that CBR revised up its end-2026 inflation forecast by 0.5pp because of the VAT hike, while at the same time Governor Elvira Nabiullina signalled that her confidence has increased that interest rates can continue to be lowered in upcoming meetings."

"The forecast for the average key rate was raised slightly for 2027 from 7.5-8.5% to 8.0-9.0%, but this is still substantially lower than the current level, which confirms the scope for further significant rate cuts."

"As an aside, the oil export price assumption for 2026 was cut to $45/bbl, down $10 from the October projection – this implies a sizeable reduction in the projected current account surplus from $27bn to just $10bn."

"Hence, while we have written before that monetary policy decisions no longer affect the artificial rouble exchange rates versus the dollar or euro, this will not be true in the event that trade flows broadly, and for energy in particular, were to dwindle."

"We continue to expect USD-RUB to trend back up towards 100.0 over the coming quarters."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)