Russia's central bank raised its borrowing price to 7% from 5,5% after the ruble plunged to an all-time low against the dollar on Moscow's military intervention in Crimea over the weekend.
The institute's press release does not mention tensions with Ukraine, which could lead to war, but only explains that the decision is aimed at preventing "inflation and financial stability risks associated with the increased level of volatility in the markets financial”.
The increase in the lending rate – a reference for one-week repo transactions – has immediate effect, adds the note.
Around 9,30 the currency remained weak: the dollar advanced to 36,47 rubles from 36,040 at the close, after having touched an annual peak of 36,6750 rubles. The Micex, the Moscow stock index, denominated in local currency, dropped more than 9%, while the dollar basket, the RTS, lost more than 11%.
