Russian central bank says it has room to raise rates further

by Reuters
Monday, 3 March 2014 18:12 GMT

MOSCOW, March 3 (Reuters) - The Russian Central Bank still has "lots of room" to raise interest rates and can further increase its involvement in the domestic foreign exchange market to stabilise the rouble, Central Bank First Deputy Governor Ksenia Yudayeva said on Monday.

The central bank raised its key lending rate by 150 basis points on Monday to 7 percent in an attempt to stem capital flight.

"We still have lots of room to raise interest rates ... and we can further increase our presence in the currency market," Yudayeva said in an interview on the Rossiya-24 news channel.

The rouble fell to all-time lows on Monday against the dollar and the euro as investors sought safe havens from the risk that Russia, after seizing control of the Crimean peninsula, might go to war with Ukraine.

It closed 2.2 percent down against the dollar after traders said the central bank had spent at least $10 billion to prop it up.

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