EEMEA | Monetary Policy & Inflation
After a recent U-turn in their rhetoric, we expect the CBR to follow other major EM central banks (Brazil, Turkey) and hike the policy rate at Friday’s meeting (19 March). The CBR statement turned more hawkish at the last meeting on 12 February and clearly signalled that the easing cycle had ended. Its updated inflation forecast raised the range for headline inflation at end-year to 3.7-4.2%.
Headline inflation rose in the past few weeks. In February, consumer prices were up 0.8%MoM, vs 0.7%MoM in January, raising the YoY rate by 0.5pp to 5.7% (Chart 1). Against seasonal trends, inflation accelerated across the main categories: food prices from 1.0%MoM in January to 1.2%MoM in February; non-food goods from 0.53% to 0.58%; services from 0.38% to 0.44% (Chart 2). Core inflation also increased in February to 0.58%MoM and 4.9%YoY (vs 4.6%YoY in January). Weekly CPI inflation remained at 0.2%WoW from 2 February to 9 March and then slowed to 0.1% from 10 to 15 of March.
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