Russia sanctions ramp up chance of bigger central bank rate hike - Morgan Stanley, JPMorgan

Morgan Stanley said it now expected Russia's central bank to raise interest rates by 50 basis points next Friday following U.S. sanctions on the country's sovereign debt market.

Reuters | London | Updated: 16-04-2021 12:27 IST | Created: 16-04-2021 12:11 IST
Russia sanctions ramp up chance of bigger central bank rate hike - Morgan Stanley, JPMorgan
Representative Image Image Credit: Pixabay

Morgan Stanley said it now expected Russia's central bank to raise interest rates by 50 basis points next Friday following U.S. sanctions on the country's sovereign debt market. Washington on Thursday blacklisted Russian companies, expelled Russian diplomats, and barred U.S. banks from buying sovereign bonds from Russia's central bank, national wealth fund, and Finance Ministry, to punish Moscow for election interference, cyber hacking, and bullying Ukraine.

Russia denies the allegations. "Despite the muted market reaction so far and hence minor implications for inflation, we think that the CBR (Russia's central bank) would want to give extra support to the market," Alina Slyusarchuk at Morgan Stanley said in a note to clients.

"We now see the probability shifting towards a 50bp hike to 5.00% at the next meeting on April 23," she said, adding she had previously expected a smaller hike. Meanwhile, JPMorgan also said the risk of Russia's central bank hiking its policy rate by 50 bps rather than 25 bps had increased with the new sanctions.

"On the monetary policy front, since the new sanctions open a new chapter in using financial sanctions against Russia, risk premia in Russian local currency assets may remain elevated for longer, which may ultimately lift CBR's assessment of a neutral policy rate," said Saad Siddiqui at JPMorgan in a note to clients.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION / BLOG / INTERVIEW

Blockchain in Healthcare: Opportunities and challenges

The use of blockchain in healthcare is a relatively new innovation with many of its uses still being explored and related technologies being developed, improved, and scaled. ...

Debate surrounding vaccine passports and development misses bigger picture

... ...

Blockchain vs IOTA: Looking for a better alternative

... ...

For stability, Iraq needs to crack down on corruption

... ...

Videos

Latest News

Cyclone Tauktae intensifies after ploughing through coastal Kerala, Ktka, Goa; 6 dead; Gujarat braces for impact

Gale-force winds, heavy rainfall and high tidal waves swept the coastal belt of Kerala, Karnataka and Goa as Cyclone Tauktae hurtled northwards towards Gujarat on Sunday, leaving six people dead, damaging hundreds of houses, uprooting elect...

UK PM Johnson: Britain's Jews should not have to endure 'shameful racism'

Prime Minister Boris Johnson said on Sunday there was no place for anti-Semitism in society and that British Jews should not have to endure shameful racism.Johnson was responding in part to a video posted online earlier on Sunday showing a ...

Jordan's king says diplomatic contacts under way to halt Israel's military campaign

Jordans King Abdullah said on Sunday his kingdom was involved in intensive diplomacy to halt what he described as Israeli military escalation that has led to the worst flare-up of violence in years.The monarch, whose ruling family has custo...

Netanyahu renews claims on Israeli airstrike

Israeli Prime Minister Benjamin Netanyahu on Sunday renewed his claim that a Gaza building levelled by an Israeli airstrike housed a Hamas office as well as American and Middle East news organizations, but gave no evidence.Netanyahu spoke t...

Give Feedback