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

UK to help vulnerable countries against Russia, China cyber threat

Britain said on Wednesday it would invest 22 million pounds 31 million to help vulnerable countries in Africa and the Indo-Pacific build up their cyber defences to prevent China, Russia and others from filling a cyberspace vacuum. British f...

Details sought about 'black fungus' among COVID patients: K'taka minister

The Karnataka government has sought information from health experts about black fungus being detected among COVID patients in the country, Health Minister K Sudhakar said on Wednesday.Addressing reporters at Chikkaballapura, he said, I had ...

U.S. removes Xiaomi from blacklist, reversing late China jab by Trump

The U.S Department of Defense will remove Chinas Xiaomi Corp from a government blacklist, a court filing showed, marking a noteworthy reversal by the Biden administration of one of Donald Trumps last jabs at Beijing before exiting office.Th...

Govt ramps up availability of Amphotericin B to fight post COVID complication Mucormycosis

Amid a sudden increase in demand observed in some states for Amphotericin B which is being prescribed by physicians to patients suffering from Mucormycosis, a post COVID complication, the Government of India is engaging with the manufacture...

Give Feedback