2023-08-15 13:39:00
The Russia risks skidding with his currency. And it also risks ending up against a wall. The Russian central bank made a sharp increase in the interest rate by 3.5 percentage points to 12%. The decision comes after yesterday’s meeting of the central bank’s board of directors which is attempting to curb inflation and strengthen the ruble after the currency hit its lowest value since the start of the war with Ukraine.
The ruble’s plunge comes at a sensitive time for Moscow, which is ramping up military spending as Western sanctions weigh more and more. Yesterday, the ruble’s exchange rate hit 101 against the dollar, losing more than a third of its value since the beginning of the year and reaching its lowest level in nearly 17 months. But it doesn’t end there. In fact, the Russian central bank has not ruled out a further increase in cases in the event of new inflationary risks.
The Bank of Russia, underlines that it “will make further key rate decisions based on how inflation dynamics unfold.” In the event of an increase in inflationary risks, “a further increase in the key rate is possible,” the central bank said. The central bank observed that the increase in the reference rate to 12% per annum is aimed at bringing inflation back to the 4% target in 2024. Meanwhile, international observers are already starting to bet on the collapse of the Russian economy.
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