The Central Bank of Russia cut its key policy interest rate by 25bp to 6.25% last week, arguing that disinflation has been faster than expected and households’ inflation expectations are declining. Consumer price inflation dropped from a recent high of 5.3% in March 2019 to 3.5% in November. We expect it to decline further in H1 2020 before picking up gradually in H2 to reach about 4% by end-2020. This leaves room for further monetary easing in the next quarters, especially as economic growth is set to remain subdued. We forecast GDP to expand by +1.3% in 2020, after +1.1% in 2019.