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Russian Central Bank raises its benchmark interest rate to 20%

Russian Central Bank raises its benchmark interest rate to 20%

The Board of Directors the Central Bank of Russia (BCR) reported this Monday, February 28, that it decided to increase the reference interest rate to 20% per year.

“External conditions for the Russian economy have changed drastically,” the entity said at first, while the crisis over the invasion of Ukraine continues.

This comes after the United States, the European Union and other countries announced the exclusion of certain Russian banks from the Swift international bank payment system and from any transactions with the Central Bank of Russia.

“The key rate increase will ensure an increase in deposit rates to the levels necessary to offset the increased risks of depreciation and inflation. This is necessary to support financial and price stability and protect citizens’ savings from depreciation, ”said the press release published on his website.

In this line, the regulator warned that after verifying “cardinal changes in external conditions”, future decisions on the interest rate will be adopted “after evaluating the risks of internal and external conditions, as well as the reactions to them in the financial markets”.

In turn, the Russian Ministry of Finance announced that together with the BCR They have proposed the compulsory sale of 80% of the foreign currency received by residents for exports, a measure that the Government will adopt this Monday, February 28.

Inflation was already skyrocketing Russia, in 2021 it was 8.39%, higher than that of 2020, which was 3.38%. This forced the Bank Central to raise your referral rate several times.

With information from the Central Bank of Russia, AFP and EFE

Source: Larepublica

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