Market Bounce To Alter Inflation, Rate Trajectory

We have revised down our end-2009 interest rate and inflation forecasts to take into account the effects of the global market bounce through Q209. We now expect consumer price growth to come in at 10.0% y-o-y and the Central Bank of Russia 's refinancing rate to be lowered to 10.50%. That said, we stress that our core scenario for further rouble weakness amid another marked outflow of foreign capital remains, and so continue to highlight the risks of another spike in interest rates in H110.

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