Russia’s central bank surprised financial markets with a two-percentage point cut in its key interest rate Friday, sending the ruble lower even as the bank said the currency was showing signs of stabilization.
The bank had come under heavy pressure from industrialists and commercial bankers to lower the rate, which had been raised 6.5 points to 17% at an emergency meeting in December as the ruble was in free fall.
But with inflation continuing to rise and prices of oil, Russia’s main export, still weak, the ruble has remained under pressure. Fears of further Western sanctions amid escalating violence in Ukraine have added to that pressure.
The White House pointed to the central bank’s move as evidence of the negative economic impact on Russia of President Vladimir Putin ’s “expedition into eastern Ukraine.”
“We’re hopeful that as these cost mount, that it will prompt…President Putin to re-evaluate his strategy,” White House press secretary Josh Earnest said.Read the rest of the story HERE.
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