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Russian central bank announces major interest rate hike Russian central bank announces major interest rate hike
(32 minutes later)
The sharp increase by 3.5% comes day after the ruble tumbled to its weakest level since March 2022 The 3.5% increase comes a day after the ruble tumbled to its weakest level since March 2022
Russia’s central bank sharply raised interest rates by 350 basis points to 12% at an emergency meeting on Tuesday as the country’s authorities are seeking to stop the rapid depreciation of the ruble.  The Bank of Russia raised interest rates by 350 basis points to 12% at an emergency meeting on Tuesday in a bid to halt the rapid depreciation of the ruble against world currencies.
"Inflationary pressure is building up," the regulator said in a statement on Tuesday. "The decision is aimed at limiting price stability risks." “Inflationary pressure is building up… The decision is aimed at limiting price stability risks,” the regulator said in a statement.
The central bank added that demand has exceeded the country's ability to expand economic output, increasing inflation and affecting "the ruble's exchange rate dynamics through elevated demand for imports."  The central bank added that demand in the economy has exceeded the country's ability to expand output, increasing inflation and affecting “the ruble's exchange rate dynamics through elevated demand for imports.”
"Consequently, the pass-through of the ruble's depreciation to prices is gaining momentum and inflation expectations are on the rise," it noted.  “Consequently, the pass-through of the ruble's depreciation to prices is gaining momentum and inflation expectations are on the rise,” it noted.
On Monday, the ruble touched a 16-month low against the dollar and euro, reaching 101 versus the US currency, and 111 against the euro. The Russian currency strengthened early on Tuesday ahead of the regulator’s statement, but later declined again, and was trading around 98 to the dollar and 107 to the euro.  On Monday, the ruble sank to a 16-month low against the dollar and euro, reaching 101 versus the greenback, and 111 against the European single currency.
The Bank of Russia announced an extraordinary meeting shortly after the sharp depreciation to reassess the key interest rate that previously sat at 8.5%. The ruble strengthened early on Tuesday ahead of the regulator’s statement, but later slid back, and was trading around 98 to the dollar and 107 to the euro at 11:44am local time in Moscow.
  The Bank of Russia announced an extraordinary meeting shortly after the sharp depreciation to reassess the key interest rate, which previously stood at 8.5%.
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