For the first time this year, Russia’s central bank trimmed its refinancing rate to a record low of 8.5 percent effective Feb 24. The move is intended to stimulate bank lending and fight the onslaught of speculative capital pushing the value of the ruble higher.
“Key factors in the manufacturing sector, as well as consumer demand, are still below precrisis levels,” the bank said. It added that the cut is intended to limit the inflow of short-term foreign capital.
The ruble’s surge was one of Russia’s key economic concerns in 2009, drawing speculators seeking to capitalize on Russia’s interest rates, which are much higher than those found in other Group of Eight leading nations.
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