In order to stop the decline of the ruble, the Russian Central Bank decided to a significant increase in the base rate. To equal to 6.5 points to 17 percentage points. The ruble directly responded positively.
The Russian central bank has raised rates massively and wants to stop the rapid depreciation of the ruble. The interest rate lies from Tuesday to 17 percent after earlier 10.5 percent, said the central bank with at night. The course of the Russian currency gained after the announcement of the decision strongly.
Part of the ruble made his losses on Monday up for it, as he had recorded the sharpest drop in one day since 1998. “The decision is aimed at the increased risks of a ruble devaluation and inflation to substantially limit”, said the central bank.
Sanctions and lower oil prices as the problem
Investors reacted positively to the decision the central bankers. “This is definitely a step in the right direction,” said Jorge Mariscal of UBS Wealth Management in New York. “This shows that they are seriously concerned about the speed with which the ruble yields.”
The decline of the Russian currency had accelerated out of fear of a tightening of Western sanctions as part of the Ukraine crisis. The previous sanctions hit already on the Russian economy. The economy has collapsed. The ruble falls on getting new record lows. Investors withdraw billions from dollars. Russian companies have only limited access to international capital markets. In addition to the decline in oil prices, which causes problems for the oil and gas exports heavily dependent on Russian economy.
fear of recession
The outlook for the economy has deteriorated significantly since the summer , The Reserve Bank of Moscow estimates that the economy is expected to contract by 4.5 percent next year, when the price of oil will average $ 60 per barrel.
The Russian President Vladimir Putin, the economic development with major challenges. Its popularity is due not least to the promise of stability and prosperity.
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