Russia’s central bank has announced it is hiking its key interest rate to 20%, up from 9.5%, to counter risks of rouble depreciation and higher inflation, as officials race to contain the fallout from western sanctions.
Moscow has also ordered companies to sell 80% of their foreign currency revenues, the central bank and the finance ministry said.
“External conditions for the Russian economy have drastically changed,” the central bank said in a statement.
Even before the interest hike, which will fuel inflation, Russia’s Central Bank has been printing banknotes as the demand for cash spiked 58-fold.
Economists are warning of more inflation and greater capital flight.
The S&P credit rating agency has downgraded Russia to “junk” status.
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