Fall of rouble continues: Russia’s Central Bank convenes emergency meeting

In response to the rapid fall of the Russian rouble, The Central Bank of Russia will raise the key rate from 8.5% to 12% per annum. We are talking about the discount rate – the value at which the financial regulator issues money to ordinary commercial banks, which affects business activity and the rate of price growth. The decision was made at an emergency meeting.

The Russian rouble entered the top three weakest currencies in the world in August of this year. The rouble lost 57% against the dollar in seven months of 2023. The Russians are now trying to limit the risks to price stability.

“Inflationary pressure continues to increase. As of August 7, the annual inflation rate increased to 4.4%. At the same time, the current pace of price growth continues to accelerate. Seasonally adjusted current growth averaged 7.6% year-on-year over the past three months. The same core inflation rate increased to 7.1%,” the Russian bank reported.

The main source of the weakening of the rouble and the acceleration of inflation is a soft monetary policy, the adviser of Russian President Maxim Oreshkin is convincing.