The Russian Central Bank raises interest rates by 350 basis points at an extraordinary meeting

Russia’s central bank raised interest rates by 350 basis points, to 12 percent, on Tuesday, in an emergency move aimed at trying to halt the ruble’s slide below 100 against the dollar after the Kremlin’s public call for tightening monetary policy.

The convening of the extraordinary meeting of the Central Bank on interest came after the ruble fell below the threshold of 100 against the dollar on Monday due to the impact of Western sanctions on Russia’s trade balance and with the increase in military spending.

Maxim Oreshkin, economic adviser to President Vladimir Putin, criticized the central bank on Monday, attributing the ruble’s decline to what he described as the bank’s monetary easing policy.

Hours after Oreshkin’s speech, the ruble fell to 102 against the dollar, and the central bank announced the emergency meeting.

“Inflationary pressures are escalating,” the bank said in a statement on Tuesday. “The decision aims to reduce risks to price stability.”

“The impact of the ruble’s decline on prices is getting stronger and inflation expectations are rising,” he added.