CBRT Interest Rate Expectation from BofA: Discount in October, Fixed until April 2027

BofA economist expects the CBRT to reduce the policy rate at its meeting in October and then keep the interest rate constant until April 2027.

Making evaluations in the report published after the CBRT maintained the policy rate at 37 percent at the MPC meeting held yesterday, BofA shared its prediction that the Central Bank will not change interest rates until April 2027, following a possible interest rate cut in October.

BofA pointed out that high oil prices and ongoing geopolitical risks, as well as inflation expectations still being high, pose an obstacle to a comprehensive interest rate reduction process.

BOFA'S 2026 AND 2027 INTEREST EXPECTATION

BofA stated that inflationary pressures are expected to ease in the first quarter of 2027 and positive base effects from energy will begin to come into play.

Including BofA's oil price assumptions, BofA predicted that the average Brent oil price will be 85 dollars per barrel in 2026 and 75 dollars in 2027.

In line with these assumptions, BofA estimates that the CBRT policy rate will be 36 percent at the end of 2026, against the inflation expectation of 29.5 percent. The bank's expectation for the end of 2027 stands out as a 32 percent policy rate against 26 percent inflation.