Central Bank of Russia said in a press release issued Tuesday that it had raised the key interest rate – the weekly repo rate – to 17% annual.
The press release said the decision was dictated by the importance of putting brake on the risks related to the devaluation of the ruble and inflation that had grown considerably of late.
The rate was revised upwards the previous time last Thursday. The increase totaled a mere 1 percentage point and the rate was fixed at 10.5% although experts had expected more resolute actions on the part of the CBR.
On the background of expectations for an increase of 2 to 3 percentage points proceeding from the dynamics of rates on the interbank market the ruble continued a slide at the end of last week and on Monday.
It set a new record of one-day fall versus the U.S. dollar and the euro as of 1999, falling 5.22 rubles to the dollar to 63.4 and 6.53 rubles to the euro to 78.81.