The Russian ruble climbed to 97 versus the US dollar at the opening of trade on Tuesday as the central bank raised the key interest rate to 12%. The currency later gave up some of the gains.
The rebound came after the Russian currency saw its biggest decline in 16 months. The ruble had weakened on Monday to 101 against the greenback and 111 to the euro. However, the currency began to recover in the closing hour of trade after the Bank of Russia announced an emergency key rate meeting.
The regulator, whose next scheduled interest rate decision had originally been planned for September 15, hiked the key rate from 8.5% to 12% during the emergency meeting on Tuesday.
The central bank had last month increased the key rate by a percentage point to 8.5%, citing rising inflation. Prior to that, the rate had remained unchanged for several consecutive meetings since last October.
On Monday, President Vladimir Putin’s economic adviser, Maksim Oreshkin, said he expects the Russian currency to stabilize, and that the central bank has all the tools necessary to deal with the issue.
At the same time, the regulator offered assurances that the ruble’s depreciation poses no risk to Russia’s financial stability.
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