Inflation and capital flight: the war in Ukraine pushes the Russian economy towards collapse
Russia’s central bank said it was raising its key rate to 20% from 9.5% to counter risks of ruble depreciation and rising inflation as authorities race to contain the fallout from the Western sanctions.
Moscow has also ordered companies to sell 80% of their foreign currency earnings, the central bank and finance ministry said.
“The external conditions of the Russian economy have changed dramatically,” the central bank said in a statement.
Even before the rise in interest rates, which will fuel inflation, Russia’s Central Bank printed banknotes as demand for cash soared 58 times.
Economists warn of more inflation and greater capital flight.
Rating agency S&P lowered Russia’s rating to “waste” status.
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