The Bank of Russia is turning the exchange rate. What will happen to the ruble exchange rate?

The Bank of Russia left the key rate unchanged at the level of 4.25% at the end of the meeting, which was expected. However, Elvira Nabiullina, head of the Central Bank of Russia, said during a press conference that the potential for further easing of monetary policy has been exhausted, thus giving reason to believe that the regulator will start to raise the rate at the next meetings.

How high is the probability of the key rate increase by the Bank of Russia in the near future and how will it be reflected? Alexander Kuptsikevich, analyst at FxPro, answered Fortrader magazine's question.

- The Bank of Russia kept unchanged and gave an important signal to the markets that the next step would be to raise rates. Debt markets had already been pricing in just such a turnaround for some time, which was reflected in rising government bond yields. As a result, although some commentators were surprised at the hints that there was a point in the decline of rates, no significant movements in the ruble and OFZ followed.

In our view, . Inflation in Russia exceeded the key rate in January, 5.2% vs. 4.25%, respectively. Inflation is accelerating because of last year's ruble and against the backdrop of recovering prices for raw materials and agricultural goods, which are also becoming more expensive in dollars.

In addition, the CBR is wary of a boom in consumer and mortgage lending. As is often the case, Russia does not mind sacrificing the speed of economic recovery in favor of macro stability. Some countries do not share this approach, pushing the monetary and fiscal stimulus pedal to the floor as much as possible. It is too early to assess which approach will prove more correct.

It seems that this style of monetary policy is more appropriate for Russia. Turkey in previous years tried to do as developed countries do (reduce rates to stimulate growth), but only devalued the lira, thus further destabilizing the national economy.

What does the hint of a point in policy easing mean for the population? First, we should not wait for lower interest rates on loans and deposits. In this regard, the coming months may be marked by an influx of those borrowers who will rush to jump into the last wagon of "cheap" loans. Second, the ruble does not fundamentally look so weak. It will look a little stronger than in further reductions of rates of the Central Bank.

The acceleration of inflation in Russia to 5.2% at the beginning of the year and forecasts that it will rise even higher in the near future made the CBR's policy stimulative rather than moderately restrictive, which the Bank of Russia sought to do a couple of years before the crisis. New rate cuts would have created risks for the ruble, as inflation would have eroded its value even further.

By the end of Friday the USDRUB was down to 73.50, and it promises to develop growth early in the day at the expense of further . A lot will depend on the heat of the sanctions rhetoric going forward. But assuming that the threats are never followed by macroeconomic sanctions (only personal ones), the Central Bank's actions give the ruble a real chance to push the dollar back below 73, breaking the December-February sideways trend and setting the ruble to test 70 in the next two months.