Russia’s central bank jacked up its key interest rate at an emergency meeting to stem a sharp selloff in the ruble and resurgent inflation, a response to the mounting financial costs of Moscow’s war in Ukraine.
The bank on Tuesday raised the rate to 12% from 8.5%, a day after the currency temporarily fell past 100 to the U.S. dollar for the first time since the weeks after Russia invaded Ukraine. The ruble recovered somewhat in anticipation of the decision but remains down by nearly a quarter this year, placing it among the world’s worst-performing currencies.
While it fell into a recession last year, the Russian economy was able to weather the wave of Western sanctions thanks to a windfall of oil-and-gas revenues, hefty government stimulus and the country’s swift ability to divert trade from Europe to Asia.
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