MOSCOW: Russia's central bank is now seen leaving rates on hold at a monetary policy meeting on Friday, a Reuters poll showed, as a ban on some Turkish food imports adds to worries over stubbornly high inflation.
The result was not clear cut, however. Sixteen economists predicted the bank would leave its main interest rate on hold at 11 percent, while 11 forecast a cut of 50 basis points.
A smaller poll at the end of November had pointed to a 50 bps cut.
The split in the latest poll reflects the dilemma facing the central bank, as inflation was still at 15.0 percent in November but the economy continues to slump on the back of weak oil prices and Western sanctions over the Ukraine conflict.
Last week, Russia banned certain Turkish food imports including some fruit and vegetables as part of a wider sanctions package in retaliation for Turkey having downed a Russian warplane near the Turkey-Syria border.
The central bank has said the sanctions, which could be expanded, may add 0.2-0.4 percentage points to the inflation rate by the end of this year and in early 2016.
"I thought the CBR would cut, but after all the noise with Turkey and concerns over the impact of food import bans on the CPI, logic suggests they hold pat," said Timothy Ash, a strategist at Nomura.
"If they cut now I think their credibility is damaged, and it just shows they target growth, not inflation."
However, Goldman Sachs predicted the central bank would cut by 50 basis points, citing its practice of measuring its policy stance versus its 12-month forward inflation forecast, which it expects to decline to 6-6.5 percent from 7 percent.
Some analysts cited the prospect of a rate rise by the US Federal Reserve in December and recent oil price weakness as factors that could prompt Russian policymakers to act cautiously.
Oil prices have fallen by over 12 percent since the central bank last met in late October, while the rouble has fallen by around 6 percent against the dollar.
The Russian central bank cut rates by a cumulative 600 basis points between January and July but has kept them on hold at the two meetings since then.
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