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Russia Raises Interest Rates to 17% While Russian Rouble Collapses
16.12.2014 18:10
Russia Raises Interest Rates to 17% While Russian Rouble Collapses

On Monday night the Central Bank of Russia took a dramatic decision to raise interest rates from 10.5% to 17% to save the country's economy from an enormous inflation.

      That move was meant to stabilise the currency. It helped to keep the rouble to 58 to the dollar early on Tuesday. However, those efforts appeared to be inefficient during Tuesday's trading session. The Russian rouble has dropped to a new record low against foreign currencies. It currently takes over 73 roubles to buy a single dollar anf 90 roubles for one euro.

      It also failed to bring down inflation either - prices are expected to be 10% higher by the end of the year. The chairwoman of the Russian Central Bank, Elvira Nabiullina have already said it is still not enough time to see the consequences of the new measures. The Bank also intends to introduce further measures for the economy's stabilisation, with First Deputy Governor Sergey Shvetsov describing the situation as "critical".

      The rouble has lost more than 50% against the US dollar this year, hit by low oil prices and Western sanctions. Both of these factors have made weak Russian economy even more vulnerable.

Author: Julia Alieva

Tags: Russian economy crisis Russian rouble   

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