The Russian Central Bank at a meeting of the Board of Directors raised the key rate to 20 percent per annum.
The Central Bank at an emergency meeting of the Board of Directors decided to raise the key rate to 20 percent, which became its new historical maximum.
“The external conditions for the Russian economy have changed dramatically. An increase in the key rate will ensure an increase in deposit rates to the levels necessary to compensate for the increased devaluation and inflation risks. This will help maintain financial and price stability and protect citizens’ savings from depreciation,” the regulator said in a statement.
The monetary policy pursued by the department should strengthen the exchange rate of the national currency and may lead to an increase in interest on loans and deposits.
“The Bank of Russia will make further decisions on the key rate based on an assessment of risks from external and internal conditions and the reaction of financial markets to them, and taking into account the actual and expected inflation dynamics relative to the target, the development of the economy over the forecast horizon,” the release says.
Moscow said it had prepared a plan of action in advance in case of a new wave of sanctions and would provide any necessary support to businesses that fell under the restrictions, ensuring the smooth operation of the economy. The government is also developing response measures, but details are not yet known.