Russian central bank raises interest rate again
Business |
Inflation, the declining value of the ruble, falling oil prices, as well as the negative effects of sanctions by the West have been cited as factors driving the central bank's decision to raise rates.
The Russian central bank announced that it has raised the interest rate to 17 percent.
According to the announcement on the central bank's official website: "This decision was driven by the need to limit recent significant increases in devaluation and inflation risks.",
The announcement comes less than a week after the central bank's last rate hike, which raised the rate to 10.5 percent on 11 December. The announcement issued with that increase warned that further rate hikes could be expected.
Inflation, the declining value of the ruble, falling oil prices, as well as the negative effects of sanctions by the West have been cited as factors driving the central bank's decision to raise rates.
Ruble continues slide despite rate hike
The ruble lost 5 percent of its value against the dollar on Tuesday, with the dollar reaching 66.99 rubles.
Combined with the 10 percent it lost on Monday, the ruble has dropped 15 percent against the dollar in 48 hours. In 2014, the ruble has lost about 50 percent of its value against the basket of major currencies.
By 12:00 Moscow time, the euro had risen to 83 rubles as well.
Two interest rate hikes, one to 10.5 percent on Dec. 11, and a more drastic increase to 17 percent early this morning, have failed to have any impact on the falling value of the ruble.
The raising of the interest rates to 17 percent is the highest increase since 1998, when Russias entire financial system fell apart, the nation defaulted on debts, and sharply rising inflation made life costly for consumers.
Anadolu Agency
According to the announcement on the central bank's official website: "This decision was driven by the need to limit recent significant increases in devaluation and inflation risks.",
The announcement comes less than a week after the central bank's last rate hike, which raised the rate to 10.5 percent on 11 December. The announcement issued with that increase warned that further rate hikes could be expected.
Inflation, the declining value of the ruble, falling oil prices, as well as the negative effects of sanctions by the West have been cited as factors driving the central bank's decision to raise rates.
Ruble continues slide despite rate hike
The ruble lost 5 percent of its value against the dollar on Tuesday, with the dollar reaching 66.99 rubles.
Combined with the 10 percent it lost on Monday, the ruble has dropped 15 percent against the dollar in 48 hours. In 2014, the ruble has lost about 50 percent of its value against the basket of major currencies.
By 12:00 Moscow time, the euro had risen to 83 rubles as well.
Two interest rate hikes, one to 10.5 percent on Dec. 11, and a more drastic increase to 17 percent early this morning, have failed to have any impact on the falling value of the ruble.
The raising of the interest rates to 17 percent is the highest increase since 1998, when Russias entire financial system fell apart, the nation defaulted on debts, and sharply rising inflation made life costly for consumers.
Anadolu Agency
