VLADIVOSTOK, Russia, Sept 12 — Russian President Vladimir Putin today said increasing inflation had forced the central bank to hike interest rates to 12 per cent last month, warning that Russia’s economy would suffer if price rises were allowed to get out of control.
Putin said he saw no problems with rouble volatility, and the authorities had a cache of tools to keep the currency and markets under control. Putin said the rouble rate was affected, among other things, by exporters not converting some foreign currency earnings to roubles, but he said that no sudden moves would be made in terms of capital controls or other steps to limit volatility.
The Kremlin publicly called for tighter monetary policy last month as the rouble tumbled past 100 to the dollar, leading the central bank to raise rates by 350 basis points to 12 per cent on August 15 in an emergency meeting.