Bank of Russia meeting on 23 October: what usually happens next

Straight to the point: on Friday, 23 October, the Bank of Russia's board of directors announces its key rate decision, and what follows is almost always the same sequence of events. The market reacts not to the figure itself but to the gap between the decision and what is already priced in. Short-dated OFZs and money market rates are repriced first, then the long end of the curve, then bank deposit and lending rates, and only last of all corporate earnings and the base from which dividends are paid. So "what happens next" is not a question about announcement day; it is a question about the sequence and the speed of transmission.

The decision is more than the rate level

Friday brings not a single number but a package: the rate decision, a press release with the wording of the forward guidance, then a press conference, and at core meetings an updated macroeconomic forecast with a projected path for the average key rate as well. For the market, the wording of the signal often carries more weight than the decision itself: a hold with a hawkish signal and a cut with a dovish one can move the curve in opposite directions, whatever the headline numbers. The current rate level and the dates of upcoming meetings are easier to check in the events calendar than to keep in your head.

The transmission mechanism itself — how a decision travels from the boardroom to your position — is covered in a separate piece: how the key rate works. This article is about what happens after the announcement.

Why OFZs move before equities

A bond is a fixed stream of cash flows, and the only thing a new rate can change is the discount rate. Repricing is therefore mechanical and almost instantaneous: the yield changes and the price adjusts. The longer the bond, the larger the price move for the same change in yield — that is a property of duration, not a quirk of any particular issue. The short end of the curve responds to the actual decision, while the long end responds to expectations for the average rate years ahead, which is why, after a dovish signal, the curve usually flattens more than it shifts. For how this looks today, see the OFZ section and, more broadly, corporate debt.

An equity's cash flows are not fixed: they themselves depend on the rate through demand, debt servicing costs and the exchange rate. That is why the reaction of the equity market is drawn out and uneven — highly leveraged companies and issuers with long payback cycles move differently from exporters and companies with a net cash position.

Banks: the fastest and most ambiguous sector

Banks reprice faster than anyone else, but the direction depends on the structure of the balance sheet. Deposit and lending rates adjust at different speeds, and for a while that gap either widens or narrows the interest margin — more on this in the piece on net interest margin. At the same time, a change in rates hits the securities portfolio on the balance sheet and the regulatory ratios: a fall in OFZ prices reduces capital through revaluation, and capital is what a bank pays dividends out of and uses to fund growth (see bank capital adequacy). Check a given issuer's current multiples on its instrument page rather than in the text: SBER, 3,92.

Dividends react last of all

The rate changes the dividend picture in two ways, and both are slow. The first is through earnings: debt costs and demand for products show up in financial statements with a lag of a quarter or more, and only after that in the payout base. The second is through the alternative: when the risk-free yield is high, a dividend stock competes with the OFZ coupon, and the return an investor requires from the share rises — in other words, for the same payout, the price is lower. So on meeting day the dividend calendar does not change; what changes is how much the market thinks it is worth. Upcoming announced payouts:

The full list is in the dividend calendar and the dividends section.

What the meeting does not decide

It is also worth saying plainly: this article has no information on what decision will be taken, and no text has such information. The platform does not publish consensus forecasts or figures for the meeting, so everything described here is the transmission mechanism, not a prediction.

How to follow it after the announcement

Step 1 — note not the rate but the wording of the signal, and whether it has changed since the previous meeting. Step 2 — look at the short and long ends of the OFZ curve: the divergence between them shows what the market has come to believe for years ahead. Step 3 — wait for issuers' next financial results, where the rate will already be reflected in debt servicing costs; upcoming releases are collected in the reporting section, and the day-to-day backdrop in the news. Step 4 — check whether terms have changed for money market funds and short-duration bond funds, through which many investors hold their liquidity: the funds section.

The powers of the regulator itself — what it decides beyond the rate and what it oversees in the market — are described in the piece on the Bank of Russia as regulator. Unfamiliar terms from this text — duration, yield curve, core meeting — are explained in the glossary.