Russia's Central Bank Raises Interest Rates

The Russian central bank raised its main interest rates by a quarter of a percentage point, with effect from tomorrow, in an attempt to curb inflation.The minimum rate for one-day loans from the central bank in repurchase auctions will increase to 6.5 percent, the Moscow-based Bank Rossii today.

The central bank has already raised interest rates once this year - by a quarter of a percentage point on Feb. 4 - in an attempt to contain rapidly rising consumer-price growth. Inflation accelerated to an annual 13.3 percent in March, the fastest pace in more than 2 1/2 years, led by food costs.




The central bank also said that the refinancing rate, seen as a ceiling for borrowing money and a benchmark for calculating tax payments, will rise to 10.5 percent.

The one-day swap rate, which the central bank charges for providing rubles in exchange for dollars or euros, will be 8.5 percent. The Russian central bank uses its currency reserves, the world's third largest, to buy and sell rubles as a way to limit the currency's fluctuations and influence inflation. The ruble trades against a basket comprising 0.55 dollars and 0.45 euros.