Russia’s central bank has hiked its key interest rate by 350 basis points to 12 percent, an emergency move to try and halt the rouble’s recent slide after a public call from the Kremlin for tighter monetary policy.
The extraordinary rate meeting came on Tuesday after the rouble plummeted past the 100 threshold against the US dollar on Monday, dragged down by the effects of Western sanctions on Russia’s balance of trade and as military spending soars.
The rouble pared gains after the decision to stand 0.3 percent weaker at 98.00 by 08:37 GMT, but still significantly above lows near 102 on Monday which had not been hit since the early weeks after Russia’s full-scale invasion of Ukraine.
Russian President Vladimir Putin’s economic adviser Maxim Oreshkin on Monday rebuked the central bank, blaming what he called its soft monetary policy for weakening the rouble.
Hours after Oreshkin’s words, the bank announced the emergency meeting, throwing the currency a lifeline.
“Inflationary pressure is building up,” the bank said in a statement on Tuesday. “The decision is aimed at limiting price stability risks.
