Ruble remains weak after emergency rate hike, Russ

Aihucha News on September 15: The Central Bank of Russia raised interest rates for the third consecutive time. This is another interest rate increase after the emergency interest rate increase a month ago. The last interest rate increase had little effect on reducing the pressure on the ruble. After the Bank of Russia raised interest rates by 350 basis points in August, the chances of a recession increased sharply. Although sharp interest rate hikes briefly halted the ruble's decline, the ruble remains weak and unstable, making imported goods more expensive, further threatening inflation. Tatiana Orlova of the Oxford Economics Research Institute said: "Given the Russian central bank's determination not to tighten capital controls, the only way they can provide support for the ruble is to raise interest rates." Since the beginning of this year, the ruble has depreciated nearly 23% against the dollar, following the Turkish lira and the Argentine peso. The most depreciated currency in emerging markets since then. Data show that the August interest rate hike has more than tripled the probability of a recession in Russia over the next six months to about 20%. If interest rates rise further, the chance of recession could approach 40%.