AKIPRESS.COM - Russia took its biggest step yet to shore up the ruble and defuse the currency crisis threatening its economy, reports Bloomberg.
The Russian central bank said it would raise its key interest rate to 17 percent from 10.5 percent, effective today. The move was the largest single increase since 1998, when Russian rates soared past 100 percent and the government defaulted on debt.
The news prompted an immediate gain in the ruble, with one-month ruble forwards up 1.6 percent in Asian trading.
So far this year, Russia has spent $80 billion of its foreign-exchange reserves in an unsuccessful attempt to prop up the ruble, which tumbled past 64 against the dollar for the first time yesterday.
The currency’s collapse has evoked the turmoil of the 1998 Russian crisis, an event that reverberated through financial markets around the world.