Russia central bank more than doubles key interest rate to 20%
Posted on 02/28/2022 3:31:59 AM PST by marcusmaximus
Russia’s central bank on Monday more than doubled the country’s key interest rate from 9.5% to 20% as its currency, the ruble, hit a record low against the dollar on the back of a slew of new sanctions and penalties imposed on Russia by Europe and the U.S. for its invasion of Ukraine.
The rate hike, the central bank said, “is designed to offset increased risk of ruble depreciation and inflation.”
This follows the central bank’s order to halt foreigners’ bids to sell Russian securities in an effort to contain the market fallout. The ruble fell as far as 119.50 per dollar, down a whopping 30% from Friday’s close.
The bank also said it would be freeing 733 billion rubles ($8.78 billion) in local bank reserves to boost liquidity. Russian Central Bank Governor Elvira Nabiullina will hold a briefing at 1 p.m. London time Monday.
The dramatic developments underline fears of a run on Russia’s banks. Already, long lines to withdraw cash have been seen at ATMs in Russian cities. Sberbank Europe, which is owned by Russia’s state-run Sberbank, says it has experienced “significant outflows of deposits in a very short time.”
(Excerpt) Read more at cnbc.com ...
Russia central bank more than doubles key interest rate to 20%
A 20% interest rate is about one-third of Russia’s actual inflation rate.
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