CBRT cuts Repo Rate by 100bps to 37.00% vs exp. 36.50% (prev. 38.00%)

• "While inflation expectations and pricing behavior are showing signs of improvement, they remain a risk factor for the disinflation process."
• "The tight monetary policy stance, which will be maintained until price stability is achieved, will strengthen the disinflation process through demand, exchange rate, and expectations channels."
• "The magnitude of the steps is reviewed with a meeting-based and cautious approach focused on the inflation outlook. If the inflation outlook diverges significantly from the interim targets, the monetary policy stance will be tightened."

The CBRT's decision to cut the repo rate by 100bps, exceeding expectations, signals a move towards easing despite persistent inflation risks. This rate cut suggests a cautious approach to supporting growth while maintaining a focus on inflation targets, which could influence investor sentiment and impact the local currency dynamics. Market expectations may now shift as traders reassess the trajectory of monetary policy in relation to this significant rate change.