Russia central bank sharply hikes rates in emergency meet to stem ruble crash

Russia’s central bank sharply raised its key interest rate by a whopping 350 basis points to 12% from 8.5% at an emergency meeting on Tuesday, as the Kremlin moves to stem the rapid weakening of the ruble.

The Bank of Russia said the decision was aimed at limiting price stability risks. “Steady growth in domestic demand surpassing the capacity to expand output amplifies the underlying inflationary pressure and has impact on the ruble’s exchange rate dynamics through elevated demand for imports.”