Macroeconomic Forecast Russia

We forecast Russia's policy refinancing rate at 8.50% by end-2012 and 8.00% in 2013. We believe the Bank of Russia's recent shift towards monetary policy tightening will remain intact in 2012 but will result in more cuts in 2013. We now expect another 25 basis points of rate hikes by the end of the year as the central bank comes under pressure to bolster its inflation-targeting credentials and bring down above-target consumer price inflation, which came in at 6.6% year-on-year in September.

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