MOSCOW, Jan. 30 (UPI) -- The Russian ruble fell 2.4 percent Friday, to as high as 71.78 to the dollar, after a surprise interest rate cut, to 15 percent, by the Central Bank of Russia.
The interest rate was reduced from 17 percent , the bank's announcement said, because Russia's rate of inflation is stabilizing, as well as an infusion of at least 2.34 trillion rubles ($35 billion) into the economy in the past week. The interest rate was increased to 17 percent, from 10.5 percent, a month ago.
The move could begin another round of volatility for the ruble, which traded at around 60 per dollar at the start of 2015.
The bank has stopped "managing financial stability risks, which I am afraid is a major backtracking step from its recent efforts. This may backfire soon, however, as all the concerns we had back in November will come back on our radar. The ruble will nosedive, undermining the confidence of investors and the population," a research note by Benoit Anne of the investment firm {link:Societe Generale said Friday, CNBC reported. : "http://www.cnbc.com/id/102384225" target="_blank"}
The ruble has been battered by a steep drop in the price of Russia's largest export, crude oil; Western economic sanctions after Russia's involvement in Crimea and Ukraine; an outflow of capital to other countries and a reluctance of foreign companies to invest in Russia until situations stabilize.
