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

KNIA urges Odisha govt to reduce floor price of chrome ore at auctions

The downstream chrome ore processors in the state have urged the government to reduce the floor price of chrome ore at auctions held by Odisha Mining Corporation OMC last month in view of the falling price of ferrochrome.The Kalinga Nagar I...

Netflix orders 'Bridgerton' spinoff about Queen Charlotte

Netflix has announced a spin-off series to Bridgerton, focussing on the origins of Queen Charlotte.In a statement, Netflix said it has officially ordered the new series with Shonda Rhimes as the writer.As we continue to expand the world of ...

Entertainment News Roundup: Russia picks cast for movie to be shot in space; 'Friends' reunion to air May 27, with slew of celebrity guests and more

Following is a summary of current entertainment news briefs.Black Panther figure joins London Madame Tussauds for re-openingMarvel superhero Black Panther went on display at Madame Tussauds in London on Friday, the latest addition at the wa...

Health News Roundup: India reports daily rise of 326,098 in coronavirus infections; Canada plots course to fully vaccinated and more

Following is a summary of current health news briefs.Canada plots course to fully vaccinated return to gatherings in fallCanada on Friday said there would be a gradual return to a world with indoor sports and family gatherings as more peopl...

Give Feedback