Russia’s Central Bank has announced a sharp hike of interest rates to 12%, a rise of 350 basis points. The decision was made at a specially convened meeting of the Bank of Russia’s Board of Directors on Tuesday.
On 14 August, the ruble plunged to its lowest value against the US dollar since 23 March 2022 and was trading at 100 roubles to the dollar.
The announcement of the board’s meeting propped up the Russian currency, which was subsequently trading at 97 rubles to the dollar.
The Russian Central Bank last raised interest rates by 100 basis points at a meeting in July.
The full-scale invasion of Ukraine and subsequent Western sanctions introduced on 28 February 2022 prompted the Bank of Russia to raise interest rates from 9.5% to 20%. On 8 April 2022, the Central Bank began lowering its benchmark rates to 7.5% where it remained until 28 October.
The ruble has been depreciating since then. In early July 2023, the dollar first reached the 90 ruble mark, subsequently rising to 94 rubles On 11 August, the Russian currency was trading at 99 rubles to the dollar.