Bank of Russia Raises Interest Rates by 1% to Curb Inflation

At its meeting today, the Russian Central Bank raised the key interest rate by 1.00% to 9.50%, the highest level since March 2017.

The central bank raised interest rates by 1.00% in two consecutive meetings, after raising rates seven times last year.

An indication of further rate hikes has also been given by the central bank to curb inflation, which reached 8.1% this month, its highest level in nearly six years and well above the central bank’s target of 4%.

The Russian central bank’s interest rate hike is also aimed at stabilizing the ruble.

Previously, in response to the spread of the COVID-19 virus and the collapse of oil prices, the country’s main source of revenue, the Russian Central Bank cut interest rates to 4.25% in August 2020, the lowest level in history.

In addition, the ruble was strengthened in response to today’s interest rate hike by the Bank of Russia.

The ruble recovered to 74.92 against the dollar, near 74.25, its highest level since Jan. 3.

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