Key Points

  • The Bank of Russia has introduced new interest rates as the Ruble falls to hit an almost 17-month low against the dollar.
  • The interest rate hike was done during an emergency meeting after the Ruble was gripped by a drop in value past the 100 mark against a US dollar

Bank of Russia has hiked interest rates by 350 basis points to 12 % during an emergency meeting as Moscow looks into halting the rapid depreciation of the Ruble.

The Bank of Russia introduced higher interest rates to tame rising inflation

The Ruble slumped past the 100 mark to the dollar on Monday, with President Putin’s economic advisor, Maxim Oreshkin, blaming lax monetary policies due to the fall in the coin’s value. 

Oreshkin wrote an article to the Russian State-owned Tass news agency saying the plunging currency and acceleration in inflation result from “loose monetary policy.” Consequently, the Bank of Russia announced an emergency meeting on Tuesday to reassess its key interest rates, which stood at 8.5%. 

In the meeting, they announced a hike by 350 basis points taking the total interest rates to 12%. As a result, faith in the Rubble increased with it, dropping to 95 against the dollar during the time of writing.

Keep watching Fintech Express for more updates on this and other finance-related developments.