The MOEX Russia Index rose to 2,875 in January, the highest level in five months, to hold the surge from December triggered by the Bank of Russia’s unexpected decision to not extend its interest rate hiking cycle. The decision preceded reports that CBR Governor Nabiullina met with politicians and business leaders that have warned the central bank against warning interest rates. Despite the hold at 21%, the central bank raised inflation forecasts, and markets expect the inflation rate to have reached a near two-year high at the end of the year. The hold drove heavyweights Sberbank, Rosneft, and Lukoil to rebound sharply from their near 18-month lows from the mid-December. On the other hand, Gazprom remained relatively close to its record low after gas flows from Russia to Europe through Ukraine at the turn of the year. Also, Surgut and Gazpromneft, major seaborne exporters for oil and fuel, recorded sharp losses since the start of January after being sanctioned by the US.
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