MOSCOW
Russian Prime Minister Dmitry Medvedev held an emergency meeting with other state officials on Tuesday night to discuss the rapidly deteriorating economy.
It is estimated that on Tuesday the ruble lost about 20 percent of its value against the dollar and the euro despite an attempt by the Russian Central Bank to stabilize the currency with an interest rates increase.
"The situation is very complicated, but we are neither the first nor the last to go through such circumstances," said Russia's minister for economic development, Aleksei Ulyukayev.
after the meeting, reported Russian news agency ITAR-TASS.
The minister said that the Central Bank would work towards providing more liquidity in foreign exchange.
"It is very important to ensure unity of action between the central bank and the government. These actions will be aimed at balancing supply and demand in the domestic market," he said.
Foreign exchange controls – a major concern in the wake of the ruble crisis - were not discussed in the meeting.
Early Tuesday morning, the Russian Central Bank announced that it had raised interest rates from 10.5 percent to 17 percent, in an attempt to stabilize the ruble, which had lost around 10 percent of its value against the dollar and the euro the previous day.
The rate hike not only failed to stabilize the Russian currency, but quickly triggered a rapid fall of the ruble against the dollar and euro, before a modest rally in the evening.
Prime Minister Medvedev had said to Russian TV, prior to the crisis on Tuesday: "Of course, I keep my money in rubles and get paid in rubles. Like all our citizens, the modification or weakening of the ruble exchange rate affects the funds I receive."
Russia's economy has been hit particularly hard this year due to falling oil prices, flight of capital and foreign-imposed sanctions as a result of Moscow’s involvement in the Ukrainian conflict and its annexation of Crimea.
The current situation is already being compared to the one in 1998, when Russia's government defaulted on its debts.
www.aa.com.tr/en
