The Traderszone Network

Published in TZ Latest News 8 August, 2014 by The TZ Newswire Staff

Russian memories of hyperinflation give central bank scope to raise rates

Russian memories of hyperinflation are giving the central bank scope to keep raising interest rates should prices spiral following a government ban on U.S. and European food imports. Price increases that peaked at more than 2,500 percent in the 1990s aren’t easily forgotten and signs inflation expectations are becoming unanchored are raising the stakes. Bank of Russia Chairman Elvira Nabiullina has said she’s prepared to keep boosting the benchmark rate, which has climbed 250 basis points since March to 8 percent, even as higher borrowing costs threaten to tip the economy into a recession.

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