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Russia’s aggressive rate rise fails to stem the tide

The value of the Russian currency has collapsed once again after an aggressive rate rise from Russia’s central bank has provided only temporary respite

The rouble had been under significant pressure in recent weeks in response to the plummeting price of oil, which has put strain on Russia’s energy-dependent economy.

Last night Russia’s central bank reacted by raising its interest rate from 10.5 per cent to 17 per cent, which provoked an immediate reaction in currency markets as the rouble appreciated by 8 per cent against the dollar.

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But the rouble has now given up all of those gains as the price of Brent crude oil fell further, dropping below $60 per barrel for the first time since 2009.

Having reached 58 roubles per dollar overnight, the continued drop in oil has pushed the Russian currency back out to 65 roubles per dollar, higher than it was before last night’s central bank intervention.