Following the 30 per cent fall of the rouble amid Western sanctions, the Bank of Russia said, on Monday, that it raised key interest rate to 20 per cent from 9.5 per cent to help cushion the impact of the rouble’s slide.
The rate rise by Russia’s central bank was an emergency response aimed at halting the rapid depreciation in the value of the rouble against the dollar, which threatens to wipe out the currency’s buying power as well as destroy the savings of ordinary Russians, the British Broadcasting Corporation reports.
This came as the UK, along with the US and EU, cut off Russia’s banks from SWIFT and financial markets in the West, placing restrictions on the central bank, state-owned investment funds and the finance ministry.
The Russian central bank appealed to the population amid growing panic that new financial sanctions from the West could spark a run on its banks, would see too many people trying to withdraw money. The bank said it had the “the necessary resources and tools to maintain financial stability,” the BBC reports.