Russia’s central bank more than doubled its interest rate to 20%

Steffy Bogdanova
February 28, 2022 12:13 pm

The Bank of Russia has increased key interest rate to 20% form 9.5%. This was done in response to sanctions imposed by Western countries.

The bank said in the official statement:

The Bank of Russia Board of Directors decided to increase the key rate to 20% per annum from 28 February 2022. External conditions for the Russian economy have drastically changed. The increase of the key rate will ensure a rise in deposit rates to levels needed to compensate for the increased depreciation and inflation risks. This is needed to support financial and price stability and protect the savings of citizens from depreciation.

The bank said it will take further key rate decisions taking into account risks and the reaction of the financial markets.

Forex Market

The Russian finance ministry and Russia’s central bank have ordered domestic exporting companies to sell 80% of their forex reserves in order to help the rouble which plunged 30% against the dollar earlier today.

The western governments imposed increasingly stricter sanctions on Russia following President Putin’s decision to invade Ukraine.

As part of the sanctions, some of Russia’s banks have been banned from using the Swift international payment system.

The bank also decided not to open the Moscow Exchange today.

Russia’s central bank stated:

Starting from 28 February 2022, the Bank of Russia temporarily bans brokers from selling securities at instructions of non-residents.

LeapRate Analyst

Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
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