Photographer: Andrey Rudakov/Bloomberg

Heed the Ruble, Says Lone Analyst Who Sees Russian Rates on Hold in 2016


Unsure where Russian interest rates are headed? It’s all about the ruble, according to the only economist to forecast that borrowing costs will stay unchanged through the rest of the year.

The Bank of Russia will stand pat as long as the ruble trades weaker than 60 against the dollar, “so it still has a long way to go,” said Damian Rosinski, an analyst at Dom Maklerski AFS, a brokerage in Warsaw. The other 19 economists surveyed by Bloomberg predict a cut at one of the three meetings remaining this year, with 11 seeing a reduction already this week. The ruble lost more than 1 percent to 65.31 against the U.S. currency at 7:54 p.m. in Moscow on Tuesday.

The central bank’s policy “actually depends on the currency,” Rosinski said by phone. “It’s a really important issue for the Bank of Russia. The recession is almost over in Russia, so it will be difficult to cut rates right now.”

His is the lone voice in favor of a pause lasting all the way to next year, even after Governor Elvira Nabiullina broke a two-month silence on monetary policy last week and warned in an unscheduled speech about the “new reality” of positive real rates in Russia. The central bank will announce its decision at 1:30 p.m. in Moscow on Friday.

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