The Russian Central Bank raised interest rates to 17% overnight hoping to stem the fall of the Russian Ruble as the country’s main source of revenue, oil, dropped in price at historic rates. A glut in oil production has created a supply abundance worldwide. Since a debt default in 1998, the Russian economy has not been hit so hard. Interest rates were already high at 10.5% before the move that did not have the affect on the currency the central bank had hoped for. The currency remained soft in trading today. Interest rates were raised to encourage holders to keep their cash for additional future increases.

Speculation by currency traders in addition to the emotions of the Russian people have helped the currency fall. It hit a new record low midday today after some early morning support. Oil is also to blame in addition to sanctions placed on the country by the USA after Vladimir Putin invaded two of the country’s neighboring states. Inflation could get as high as 25% next year in the country with imports becoming ever more expensive. A recession is also being predicted as political pressure mounts for the President.

Russian ruble collapse, higher interest rates not helping