The Russian central bank is meeting urgently due to the rapid fall of the ruble
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On Tuesday, the Central Bank of the Russian Federation will hold an emergency meeting regarding the discount rate due to the fall of the ruble to a 16-month low of 100 rubles per dollar.
It is reported Financial Times.
The scheduled meeting of the Central Bank of the Russian Federation was scheduled for September 15, but due to the rapid fall of the ruble, the regulator’s officials will meet on Tuesday and potentially increase the key discount rate, which currently stands at 8.5%.
The dollar rate on the Moscow Stock Exchange on Monday got up above 100 rubles for the first time since last March, the euro is trading at 110 rubles. The sharp drop in the Russian currency has sparked public disagreements among top Russian officials amid the Kremlin’s long-running efforts to reassure the market about the ruble’s weakening.
The Russian Central Bank states that the ruble is under pressure from a number of factors, in particular – a drop in export volumes and a simultaneous increase in domestic demand for imports amid an increase in government borrowing, which is needed by the aggressor to finance the war against Ukraine.
The fall of the ruble is facilitated by the growth of the budget deficit due to the increase in spending on the army, the drop in export earnings and the growing dependence on imports. All this is also attributed to the acceleration of inflation, which in July exceeded the target indicator of the central bank and rose to 4.3% and may rise to 5-6.5% this year.
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