The Bank of Russia Board of Directors decided to cut the key rate from 8.25% to 7.75%, thus implementing the assumptions of the forward-looking policy. Unlike in previous statements, the central bank did not say that global geopolitical risks along with fluctuations in the Rouble posed upside risks for Russian consumer inflation, but justify the decision as the consequences of extension of the agreement to reduce oil production that brings pro-inflationary risks down. Market participants expected to maintain a more smoothed path, because the consensus assumed a reduction of the main interest rate only by 25 bp. The Russian officials see further room for rate cuts in the next six months horizon, which will partially contribute to stabilizing the growth of consumer prices at 4.0% at the end of 2018 (from current 2.5%). Moreover, The Bank of Russia holds open the prospect of some key rate reduction in the first half of 2018.

Let's now take a look at the USD/RUR technical picture at the H4 time frame. After the decision, the weakening of the Rouble is observed. In the first reaction USD/RUB records traffic exceeding 10 figures above the technical support level at 58.45, but then the price quickly drops back to the range. Currently, the market is trading sideways in a zone between the levels of 58.70 - 58.54. In a case of a further drop, the next technical support is seen at the level of 58.19, and in a case of a further rally, the next technical resistance is seen at the level of 59.92.