Russia Hikes Rates To 12% In Emergency Move To Halt Rouble's Collapse

Russia's central bank unexpectedly hiked its key interest rate by 350 basis points to 12% on Tuesday, an emergency move to try and halt the rouble's recent plunge after a public call from the Kremlin for tighter monetary policy.

This was the second straight increase and the sharpest since the start of the of Ukraine war almost 18 months ago. The emergency meeting came after the rouble tumbled past the 100 threshold against the dollar on Monday, dragged down by the impact of Western sanctions on Russia's balance of trade and as military spending soars.

The rouble pared gains after the decision to stand 0.5% weaker at 98.16, but still significantly above lows near 102 on Monday which had not been hit since the early weeks after Russia invaded Ukraine.

On Monday, president Vladimir Putin's economic adviser Maxim Oreshkin rebuked the central bank, blaming what he called its soft monetary policy for weakening the rouble. Hours after Oreshkin's words, the bank announced the emergency meeting, throwing the currency a lifeline.