The Russian giant is beginning to sway. At long last, after years of sanctions, the effects are finally beginning to be felt. The Russian economy is now punchdrunk, weak at the knees, and it is no longer a question of whether the giant will fall, but when.
Monetary policy
The Central Bank of Russia (CBR) cut the key interest rate by 100bps t0 17%, after it had already it cut to 20% on 6th June and then 18% on 25th July. Inflation fell to 8.1% mid-September, from August’s 9.4%, having fallen from 10.3% in March, and hitting 9.2% in June. Last month the CBR noted that no clear downward trend had yet developed, but this month adjusted its inflation forecast lower to the 6.0-7.0% range for 2025 and down to 4.0% in 2026. The ruble weakened over the last month, with 83.01 rubles needed to purcase one USD yesterday (29th Sep) versus 84.48 on 12th September. We note that black market rates for hard currency are 15-20% higher than the official exchange rate. We also note that whilst stringent w...
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