Russia has announced an increase in its interest rates to combat inflation across the country.
The nation's central bank announced that rates would be raised one percentage point to 10.5 per cent, six weeks after it was changed from eight per cent to 9.5 per cent. Officials at the bank stated that it was concerned over "further aggravation of inflation risks" and that it would continue to raise the rate to help combat this measure.
Russian ministers warned last week that the country could fall into recession next year as Western sanctions and falling oil prices hamper its performance. The nation's economic development ministry estimates a 0.8 per cent contraction in the economy in 2015, this is a significant downgrade on previous predictions of 1.2 per cent growth.
The country has been affected by sliding oil prices which have been on the decline since the start of the year. Russia relies heavily on the export of oil produced in the nation and recently voiced its opposition to a debate on whether members of the Organization of Petroleum Exporting Countries (Opec) should reduce output.
Despite Russia not being a member of Opec it still stated that it had no intentions of reducing its production levels. Opec decided that output would remain unchanged in the hope that prices would improve in the future.
While the central bank looks to increase interest rates to combat the threat of inflation, BBC's Moscow correspondent Steven Rosenberg explained that the decision could slow economic growth. The rouble was also trading at lows of 55.45 against the dollar and 68.98 against the euro.
Mr Rosenberg said: "The hope is that [interest rate rises] will cut consumption and stop prices rising so fast. As for the rouble, it has continued to slide and has fallen to a new low against the dollar."
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