Bank of Russia Raises Rates

Central Bank of Russia decided on March 3rd to temporarily raise interest rates by 1.5 percentage points due to an increased risk to financial stability and inflation.

The benchmark lending rate rose from 5.5 percent to 7 percent and the repo rate, at which banks receive liquidity increased to 8 percent. 

The surprise move will take effect from 11 AM Moscow time.

The Board of Directors of the Bank of Russia said that “The decision is aimed at preventing the emergence of risks to inflation and financial stability associated with the recently observed increased levels of volatility in the financial markets.”

Earlier on March 3rd, the Russian ruble fell 2.9 percent against the US dollar, as political turmoil in Ukraine and fears of international sanctions led investors to take money out from Russia.

Bank of Russia Raises Rates

Joana Taborda |
3/3/2014 9:25:23 AM