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Russia Central Bank Slashes Interest Rates to 11%

  • Russia’s central bank slashed interest rates to 11%, from 14% previously, on Thursday.
  • It is trying to limit a rally in the ruble, which has been boosted by government policy.
  • The ruble fell after the decision but remained well above its February levels.

Russia’s central bank slashed interest rates sharply Thursday in an effort to reduce the value of the ruble, which has soared against the dollar in recent weeks.

The Central Bank of Russia cut the benchmark rate to 11%, from 14% previously, in an emergency meeting called two weeks early.

The ruble initially plunged against the dollar when Russia invaded Ukraine in late February as the war shook Moscow’s financial markets.

But the government put in place strict capital controls and the central bank hiked interest rates, moves which have sent the currency soaring against the dollar.

The ruble fell after the central bank’s rate hike, and was last 1.38% lower at 61.05 to the dollar.

The currency traded at around 76 to the dollar in early February, but plunged to a low of 140 shortly after the invasion.

Russia’s government has since started talking of the strong ruble as a problem for exporters as well as the budget, because the government takes some energy taxes in foreign currency.

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