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Ruble declines despite Central Bank rate hike

After a massive overnight rate hike by Russia's Central Bank, the ruble staged a two-hour rally Tuesday morning before rolling back to new historic lows.

The surprise Central Bank decision to raise the rate to 17 percent from 10.5 percent came in the early hours on Tuesday in a desperate attempt to prop up the troubled currency. It's the biggest interest rate hike since 1998, the year when Russia defaulted on its sovereign bonds.

The move was meant to make it expensive for currency traders to buy rubles and sell them on the market.

The ruble in the morning regained almost all of its losses from Monday's 10 percent decline, the biggest fall since the 1998 economic meltdown. But it rolled back and was down 3 percent at 66 to the dollar by noon in Moscow (0900GMT).

Associated Press
Published on:
December 16, 2014
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