Russia’s central bank makes interest rate hike to prop up falling ruble
(15 Aug 2023) RESTRICTION SUMMARY: ++PLEASE NOTE: AP IS OPERATING IN RUSSIA ACCORDING TO RUSSIAN RESTRICTIONS ON ALL REPORTING RELATED TO THE ONGOING MILITARY OPERATION IN UKRAINE++ ASSOCIATED PRESS Moscow - 14 August 2023 1. Various of building exterior of Bank of Russia 2. Wide of people passing by the building of Bank of Russia ASSOCIATED PRESS Moscow - 15 August 2023 3. SOUNDBITE (English) Chris Weafer, CEO of Macro-Advisory: “The weak ruble does not imply an underlying economic crisis. It doesn't suggest that Russia is about to fall off a cliff or have a financial crisis. Of course, everybody remembers August of 1998, of course, the defaults and how the financial crisis ended. This is not this similar in any way.” ASSOCIATED PRESS Moscow - 14 August 2023 4. Various of bank exterior with screen showing currency exchange rate reading (Russian): “Purchase of currency: U.S. dollar: 96,10 Russian rubles, sale of currency: U.S. dollar: 101,6 Russian rubles. Purchase of currency: Euro: 106,0 Russian rubles, sale of currency: Euro: 111,5 Russian rubles.” ASSOCIATED PRESS Moscow - 15 August 2023 5. SOUNDBITE (English) Chris Weafer, CEO of Macro-Advisory: “Given that Russia is now spending its money almost entirely in supporting the military, as well as supporting key industries and in funding social programs, there's very little else in the budget, then the prospect of cutting one of those areas is obviously something that scared the Kremlin and led them to this latest wave of devaluation, which appears to be overdone." ASSOCIATED PRESS Moscow - 14 August 2023 6. Various of Kremlin exteriors ASSOCIATED PRESS Moscow - 15 August 2023 7. SOUNDBITE (English) Chris Weafer, CEO of Macro-Advisory: “I think this is now with the message from the Central Bank and from others is, is that the weakness was planned, but it's overdone and they want to pull it back.” ASSOCIATED PRESS Moscow - 14 August 2023 8. Various of Spasskaya Tower exterior STORYLINE: Russia’s central bank hiked interest rates on Tuesday, in an emergency move designed to fight inflation and strengthen the ruble after the country’s currency reached its lowest value since early in the special military operation in Ukraine. The ruble has lost more than a third of its value since the beginning of the year as Moscow increases military spending and Western sanctions weigh on its income from energy shipments. The flagging currency does not mean the Russian economy is in freefall — though it is facing challenges, including rising prices for households and businesses, according to analysts who study Russia. A lower exchange rate allows Moscow to transfer the dollars it earns from selling oil and natural gas into more rubles to pay pensions and run government agencies. But the drop in value went a bit too far, and officials are now tightening it up, analysts say. While over time sanctions will erode long-term economic growth, the recently weaker ruble “does not imply an underlying economic crisis, it doesn’t suggest Russia is about to fall off a cliff,” said Chris Weafer, CEO of Macro-Advisory Partners. The central bank hiked its key rate 3.5 percentage points to 12% after announcing a meeting of its board of directors a day earlier as the ruble declined. The Russian currency passed 101 rubles to the dollar Monday, hitting the lowest level in almost 17 months. The ruble strengthened after the rate hike announcement but has since given up some of those gains to hit about 98 to the dollar. Its next meeting is planned for Sept. 15. Find out more about AP Archive: http://www.aparchive.com/HowWeWork Twitter: / ap_archive Facebook: / aparchives Instagram: / apnews You can license this story through AP Archive: http://www.aparchive.com/metadata/you...
