In response to the ruble’s devaluation and rising inflation, Russia’s central bank today raised its key interest rate from 9.5% to 20%.
The Russian Central Bank has also instructed Russian private companies to sell foreign currency holdings amounting to 80% of foreign exchange trading revenues.
Yesterday, the Russian Central Bank announced a series of measures to support the domestic market. Over the past week, the central bank has been struggling with the effects of Western sanctions.
Today’s announcement of a massive 10.5% interest rate hike is intended to halt the ruble’s slump. As of today, the ruble has fallen almost 30% against the U.S. dollar to a record low.
The decline is due to the impact of international sanctions imposed on Russia.