- The Bank of Russia raised interest rates by 350 basis points to 12% at an emergency meeting Tuesday.
- It’s trying to prop up the ruble, which plummeted to a 16-month low this week.
- The currency strengthened in the immediate aftermath of the central banks latest move.
The Bank of Russia said in a statement that it would raise rates by 350 basis points to 12%, lifting borrowing costs to their highest levels since just after Vladimir Putin invaded Ukraine.
It brought in the rate hike after the ruble fell to a 16-month low of nearly 102 to the dollar Monday, leading to Moscow publicly rebuking the central bank.
In an op-ed for the state-owned news agency TASS, Putin’s economic advisor Maxim Oreshkin blamed “soft monetary policy” for both “the ruble’s weakening” and the “acceleration of inflation,” which rose to 4.3% in July.
