Today on 11 December 2014 Russia's central bank hiked its key rate by 100bp to 10.50% as consumer prices continued to accelerate quickly to 9.4% y/y as of 8 December 2014. The hike was expected by the consensus (we had expected a 250bp rate hike), which moved up by 50bp a day before the announcement. As the rouble has lost around 15% against the US Dollar and the euro within the last 30 days, inflation expectations have been deteriorating further, pushing the central bank to act.
Unchanged in Hungary and the Czech republic next week
Our call for rate decisions in both the Czech Republic and Hungary is for unchanged decisions next week. It is also the consensus expectation. While we expect both central banks to stay on hold, the pressure on them to ease monetary policy further is increasing.
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