All news
Expectations from the Bank of Russia meeting on October 25
The Russian Central Bank will hold a major monetary policy (MP) meeting next Friday. CS is expected to rise to 21% while maintaining a strong signal.
Why do you think the Central Bank will choose the 200 bp step? • Inflation accelerated in September to 9.8% year-on-year and 7.5% seasonally adjusted year-on-year. In August. The core index also showed an upward trend for three months in a row, up 6.1% year-on-year. In July, it rose 7.7% year-on-year. In August, 9.1% d.kg. In September. • The average term is 3 months. Inflation has risen to 11.2% this year. From 11.0%. Despite the rate hikes that have already taken place, we see that price growth is not only slowing down, but accelerating. • Household inflation expectations increased in October, reaching 13.4% for the year ahead, up from 12.5% in September. It is worth noting here that due to the increase in collection of recyclable materials and the increase in the housing and utilities index from July 1, 2025 by 11.9%. • The Central Bank notes that the further expansion of the budget deficit to 0.7% of GDP in 2024 should be accompanied by an appropriate response from monetary policy.
The Bank of Russia notes that the first signs of the consequences of the increase in real interest rates are beginning to appear, but this has not yet had an impact on inflation. So, the situation is developing.
Finally, it should be noted that the higher the ratio, the smaller the relative change provided by the same steps. For example, an increase from 10% to 12% would be a 20% tightening, while an increase from 19% to 21% would be a 10.5% tightening. According to this logic, the higher the nominal gear ratio, the wider the steps must be to achieve the same stiffness.
It is reasonable to say (despite the previous paragraph) that higher rated speeds will run faster than lower ones (for conventional transmissions today this is not the case). And the higher this coefficient, the more risks appear in the real sector.