Consumer prices rose by 2.55% m/m, lower than both consensus (Bloomberg, 2.7%) and our expectation (2.85%), leading to its annual inflation to retreat to 32.9%. We now expect 2025 year-end inflation to be 32.5%, raising upside risks on our 2026 year-end forecast of 23% as well.

The CBRT reduced the policy rate by 100bps to 39.5%, parallel to the majority of the rate cut expectations of 100-150bps, with also a similar size of cuts in the corridor (38%-42.5%). We still maintain the view of gradual rate cuts going ahead, yet with increasing inflationary pressure.