Dec 16, 2014
By Michael Kramer
The Russian ruble has been shaken again today.
The currency dropped at one point by a disastrous 20 per cent – to a new historic low – despite a huge overnight interest rate hike from Russia’s Central Bank.
State television was urging citizens not to panic – as ordinary Russians rushed to buy imported products such as fridges and cars – with inflation making those items more expensive daily.
The Central Bank’s surprise decision to raise the interest rate to 17 per cent from 10.5 per cent – appeared to be a desperate attempt to prop up the troubled currency.
The ruble has fallen sharply in recent weeks and is down more than 60 per cent since January.
The plunge is due to sinking oil prices and the impact of Western sanctions imposed over Russia’s involvement in the Ukraine crisis.