The Russian Central Bank has raised its key interest rate to 10.5 percent, in an effort to defend its currency and curb inflation. The decision was in line with analysts’ expectations. The increase of one percentage was the second in a short time.
The ruble has fallen nearly 40 percent since last summer, as a result of falling oil prices and the West’s sanctions because of the conflict in Ukraine. On Thursday morning, the course was about 55 rubles per dollar.
Oil and gas account for two-thirds of Russia’s exports, and oil prices therefore has a huge impact on the economy. Crude oil traded on Thursday for just under $ 65 a barrel.
The central bank expects GDP growth of 0.6 percent this year. 2015 and 2016 are expected zero growth. Inflation next year can exceed 10 percent, believes the bank.
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