On Monday, February 28, the Board of Directors of the Bank of Russia more than doubled its key rate, from 9.5% to 20% per annum.

The value was the highest for the entire time of observation.

“The external conditions for the Russian economy have changed dramatically.

An increase in the key rate will make it possible to ensure an increase in deposit rates to the levels necessary to compensate for the increased devaluation and inflation risks.

This will help maintain financial and price stability and protect citizens' savings from depreciation," the Central Bank said in a press release.

When making further decisions on the key rate, the Central Bank will proceed from an assessment of risks from external and internal conditions and the reaction of financial markets to them.

In addition, the regulator will take into account the actual and expected dynamics of inflation and economic development.

The Central Bank decided to raise the key rate against the backdrop of a sharp weakening of the Russian currency.

During trading on Monday, the dollar and euro rates on the Moscow Exchange grew by more than 31% and at the moment rose above 109 and 121 rubles, respectively, writes TASS.

“We see the emotional reaction of investors to the sanctions that were announced over the weekend by the European Union and the United States against the financial sector of Russia and the Central Bank.

Therefore, there is nothing surprising in the fact that today the dollar and euro rates have gone up sharply.

A sharp increase in the key rate is a stabilizing factor for the national currency, ”said Artyom Deev, head of the analytical department at AMarkets, in a conversation with RT.

Recall that on the night of February 27, the United States, together with the European Commission, France, Germany, Italy, Great Britain and Canada, announced the introduction of new anti-Russian restrictions.

Restrictions, in particular, imply the disconnection of some Russian banks from the international SWIFT system.

In addition, Western countries plan to freeze the Central Bank's gold and foreign exchange reserves, which are estimated at more than $640 billion.

Earlier, to support the ruble, the Central Bank began to sell foreign currency from its reserves.

It is assumed that the new restrictions of the West may limit such operations.

At the same time, experts interviewed by RT consider it impossible to completely block the reserves of the Central Bank.

“Today, about 50-60% of our reserves are located abroad.

That is, we are talking about about $ 300 billion. However, the money remaining on the territory of Russia is quite enough to support the national currency for a long time, ”Georgy Ostapkovich, director of the Center for Market Research at the Institute for Statistical Research and Economics of Knowledge, HSE, explained to RT.

At the same time, the increase in the key rate should provide additional support to the ruble and at the same time curb inflation.

Sergey Suverov, an investment strategist at Arikapital Management Company, spoke about this in an interview with RT.

“By its actions, the Central Bank is trying to prevent panic in the foreign exchange market and increase the attractiveness of ruble assets for depositors.

This should somewhat reassure citizens who see that the authorities are taking anti-crisis measures to preserve their ruble savings.

Also, with the help of a sharp increase in the rate, the Central Bank is struggling with inflationary risks, which are seriously growing against the backdrop of the situation with the dollar and euro rates, ”Suverov explained.

  • AGN "Moscow"

Traditionally, Russian banks closely monitor changes in the key rate of the Central Bank and, based on the decisions taken by the regulator, independently determine the level of long-term lending and deposit rates.

Thus, a sharp tightening of monetary policy should lead to a noticeable increase in interest on loans and bank deposits, which will cool consumer demand and put pressure on inflation, experts believe.

“People feel exchange rate changes and rising inflation.

And if you want to keep the money supply of the population on deposits, such an increase in the rate looks quite adequate ... At the same time, this measure should be temporary - for a period while such a turbulent current in the economy.

In the future, the key rate should be reduced to reasonable limits, ”explained Alexander Tsyganov, head of the Department of Insurance and Economics of the Social Sphere of the Financial University under the Government of Russia, in an interview with RT.

Simultaneously with the increase in the key rate, the authorities, at the suggestion of the Central Bank and the Ministry of Finance, plan to oblige exporters to sell 80% of foreign exchange earnings.

Thus, the authorities want to further increase the demand for rubles and thereby stabilize the situation on the stock exchange.

“The initiative will remove the speculative demand for the currency.

This should help the economy, as there will be more supply of currency in the market, and at the same time reassure investors.

Already now the authorities are working ahead of the curve.

All key measures in general have already been taken.

I do not exclude that the Central Bank will continue to raise the rate, and the Ministry of Finance will oblige exporters to sell 100% of foreign exchange earnings, ”concluded Sergey Suverov.