Russia's central bank has raised its key interest rate by 3.5% in a move designed to fight inflation and strengthen the ruble after the country's currency fell to its lowest value since early in the war with Ukraine.
The decision was announced after an emergency meeting of the bank's board of directors was called a day earlier as the ruble plunged.
The fall comes as Moscow increases military spending and Western sanctions hit its energy exports.
The Russian currency passed 101 rubles to the dollar yesterday, losing more than a third of its value since the beginning of the year and hitting the lowest level in almost 17 months. It had recovered slightly after the central bank announced the meeting.
The central bank said demand has exceeded the country's ability to expand economic output, increasing inflation and affecting "the ruble's exchange rate dynamics through elevated demand for imports".
"Consequently, the pass-through of the ruble's depreciation to prices is gaining momentum and inflation expectations are on the rise," the bank said in a statement.
Vladimir Putin's economic adviser Maksim Oreshkin blamed the weak ruble on "loose monetary policy" in an op-ed, adding that the central bank had "all the tools necessary" to stabilise the situation and that he expected normalisation shortly.
