Russia's central bank sharply raised its key rate Monday in a desperate attempt to shore up the plummeting ruble and prevent the run of banks amid crippling Western sanctions over the Russian war in Ukraine.
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The bank hiked the benchmark rate to 20% from 8.5%. That followed a Western decision Sunday to freeze Russia's hard currency reserves, an unprecedented move that could have devastating consequences for the country's financial stability.
It was unclear exactly what share of Russia's estimated $640 billion hard currency coffers would be paralyzed by the decision by Western nations to block Russian banks from the SWIFT global payment system. European officials said that at least half of it will be affected.
That dramatically raised pressure on the ruble by undermining the financial authorities' ability to conduct hard currency interventions.
