MOSCOW (Reuters) – Russia’s central bank hiked its key interest rate by 350 basis points to 12% on Tuesday, an emergency rate move to try and halt the rouble’s weakening past 100 to the dollar after a public call from the Kremlin for tighter monetary policy.
The extraordinary rate meeting came after the rouble plummeted past the 100 threshold against the dollar on Monday, dragged down by the impact of Western sanctions on Russia’s balance of trade and as military spending soars.
President Vladimir Putin’s economic adviser Maxim Oreshkin on Monday rebuked the central bank blaming what he called its soft monetary policy on the weakening rouble.
Hours after Oreshkin’s words, as the rouble dived towards the 102 mark against the dollar, the bank announced the emergency meeting, throwing the currency a lifeline.
“Inflationary pressure is building up,” the bank said in a statement on Tuesday. “The decision is aimed at limiting price stability risks.”
(Reporting by Reuters; Writing by Alexander Marrow; editing by Guy Faulconbridge)
