Russian central bank raises rate to 20% in emergency, asks companies to sell currency

Russian ruble coins are seen in front of the descending stock market chart displayed in this illustration taken February 24, 2022. REUTERS/Dado Ruvic/Illustration

Join now for FREE unlimited access to


  • The central bank raises its key rate to 20% from 9.5%
  • Moved to fight the ruble, inflation
  • Russia tells companies to sell currencies
  • Cenbank says it has halted FX market interventions due to sanctions

Feb 28 (Reuters) – Russia’s central bank raised its key rate to 20% from 9.5% on Monday in an emergency measure, and authorities told export-focused companies to sell foreign currency as the ruble was falling to record lows.

The ruble hit a low of 120 to the dollar on electronic currency exchange EBS after President Vladimir Putin on Sunday ordered his military command to put nuclear forces on high alert, while the West imposed severe sanctions against Russia. Read more

In another attempt to prop up the rouble, Russian authorities have asked Russian exporting companies to sell 80% of their foreign currency earnings on the market, Finance Minister Anton Siluanov said.

Join now for FREE unlimited access to


Outlining the new emergency measures, Central Bank Governor Elvira Nabiullina said the central bank stopped its interventions on Monday due to the latest Western sanctions, suggesting the ruble was supported by other unnamed market players .

The Bank of Russia sold about $1 billion of its reserves on Thursday, February 24, the day Russia launched what it calls a “special operation” in Ukraine, and also carried out currency sales on Friday, said Nabioullina.

“Due to the restriction on the use of gold-forex reserves in dollars and euros, we did not make any interventions today,” Nabiullina said.

Nabiullina also said that Russia has an internal replacement for the SWIFT international payment system, adding that foreign counterparts can join.


The central bank, which says it is aiming for 4% inflation and will do whatever is necessary to ensure financial stability, said the rate hike would bring deposit rates to the levels “necessary to offset increased downside risks. and inflation”.

“This is necessary to support financial and price stability and protect citizens’ savings against depreciation,” he said.

The rise in rates to levels above the 17% seen in 2014 when Russia annexed Crimea to Ukraine comes after Western countries decided to block certain Russian banks’ access to the international payment system SWIFT to punish Moscow for its invasion of Ukraine.

Russia calls its actions in Ukraine a “special operation” which it says is not designed to occupy territory but to destroy the military capabilities of its southern neighbor and capture what it sees as dangerous nationalists.

“The external conditions of the Russian economy have changed dramatically,” the central bank said in a statement.

The recent measures add to a series of measures announced since Thursday to support domestic markets, as the state struggles to manage the growing fallout from Western sanctions.

Russian authorities have also ordered brokers to suspend short selling in the Russian market and to stop executing orders from foreign legal and natural persons to sell Russian securities.

“These measures may help calm heightened market jitters, but at the same time they undermine the foundations of monetary policy, which is focused on inflationary targeting and flexible exchange rate,” BCS Global Markets said in a note.

“The unfavorable external environment has made Russia’s monetary policy unsustainable and we do not rule out a possible rate hike in the future or further unexpected, non-market related moves.”

Join now for FREE unlimited access to


Reuters reporting; Editing by Catherine Evans, Ed Osmond and Hugh Lawson

Our standards: The Thomson Reuters Trust Principles.

Comments are closed.