Another CBR hike may be in the cards for Russia in September

At the September policy meeting, the CBR is likely to consider staying on hold or hiking its policy rate 25bp or 50bp. However, we think a 25bp hike is marginally more likely than the two other outcomes.What you will learn:

• Inflationary pressures may remain elevated in the coming weeks, if not months. Covid-related disruption to global supply chains is likely to push up input costs even further.
• Household demand continues to expand, supported by rising real wages, booming consumer lending, and pre-election handouts.
• Inflation expectations fell in August vs. the July peak, but still are in the double digits (12.5%).