Paul Fage, Senior Emerging Markets Strategist at TDS, notes that at its recent board meeting the CBR kept its Key Rate on hold at 11.0%. Key Quotes “This was in line with our and the consensus expectation. We saw some risk that the CBR might use recent ruble strength to cut its policy rate. However, the CBR says it is concerned about the inflationary impact of ruble weakness between late 2015 and late 2016. Also the CBR sees the economic downturn as being less severe this year than previously expected as a result of the rebound in oil prices. We expect the CBR to maintain its cautious stance, but we think that rates will be gradually lowered over the course of this year. While the cautious stance of the CBR will help support the ruble, we continue to see oil prices as being the main driver of USDRUB. Given TD’s view that oil prices will move higher over the course of this year, we expect USDRUB to continue to trend downwards.” For more information, read our latest forex news.