Ruble Falls, Russia Raises Reference Interest Rate To 20 Percent

The Russian flag flutters above the headquarters of the Central Bank of Russia in Moscow, Russia December 3, 2018. (Photo: ANTARA/REUTERS/Maxim Shemetov)

JAKARTA - Russia's central bank raised its main interest rate to 20 percent from 9.5 percent on Monday in an emergency move. Authorities told export-focused companies to sell foreign currency as the ruble fell to a record low.

"External conditions for the Russian economy have changed drastically", the Central Bank of Russia said in a statement.

"An increase in the key interest rate will ensure an increase in deposit rates to the level required to offset rising depreciation and inflation risks. This is necessary to support financial and price stability and protect people's savings from depreciation."

Central Bank Governor, Elvira Nabiullina, will hold a briefing at 1300 GMT, the bank said.

In another attempt to support the ruble, the central bank and the finance ministry also jointly ordered Russian exporting companies to sell 80 percent of their foreign currency earnings on the market.

The recent moves add to the many measures announced since Thursday, February 24 to support the domestic market, as the country struggles to manage the widespread impact of Western sanctions imposed in retaliation for Russia's invasion of Ukraine.