Russia’s rising inflation and plunging currency have spotlighted an emerging discord between the Kremlin and the country’s central bank.
Prior to the Kremlin's intervention, the Bank of Russia blamed the country's shrinking balance of trade for the inflation and currency frailties, as Russia's current account surplus fell more than 85% year on year from January to July.
Agathe Demarais, global forecasting director at the Economist Intelligence Unit, told CNBC that the central bank was right in its earlier assessment that the collapse in Russia's current account surplus was the key factor behind high inflation. "The combination of these factors shows that the room for manoeuvre of the Russian government is shrinking: the Russian leadership must now make a choice between battling inflation or propping up growth — both key drivers of social stability," she said.
"Often currency collapses are prompted by nervous international investors or fleeing domestic capital. Sanctions and capital controls have left Russia isolated from the international financial system," Kennedy said.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Russia hikes interest rate as hackers mock Putin over slide against US dollarRussia raised interest rates in an emergency session of finance officials after a Kremlin aide issued a public demand that they halt the ruble’s embarrassing slide against the U.S. dollar.
Read more »
Ukrainian ship carrying grain sails from Odessa, testing Russian threatAfter Russia ended a U.N.-sponsored deal to allow safe passage for cargo ships carrying Ukrainian grain, the Kremlin warned that all boats in the Black Sea could be targets.
Read more »
China’s defence minister visits Russia and Belarus in show of supportChinese Defence Minister Li Shangfu is visiting Russia and Belarus in a show of support as the West attempts to isolate the two allies over Moscow’s invasion of Ukraine. Li departed on Monday on the
Read more »
Russia planning 'false flag' attack on own nuclear plant: UkraineUkraine's National Resistance Center said it obtained leaked documents that show the Kremlin is is preparing a provocation at the Kursk Nuclear Power Plant.
Read more »
FBI official who worked Trump-Russia probe pleads guilty to conspiring with Russian oligarchAn ex-FBI official who was part of the bureau’s Trump-Russian collusion probe into former President Donald Trump’s 2016 campaign pleaded guilty Tuesday to conspiring with a Russian oligarch, the Justice Department announced.
Read more »
Russia’s central bank makes huge interest rate hike to try to prop up falling rubleRussia’s central bank made a big interest rate hike of 3.5 percentage points on Tuesday, an emergency move designed to fight inflation and strengthen the ruble after the country’s currency reached its lowest value since early in the war with Ukraine.
Read more »