The Russian ruble slumped on Monday to its lowest level since March 2022, immediately after President Vladimir V. Putin launched Moscow’s full-scale invasion of Ukraine.
Amid escalating concern about the weakening currency, the Russian central bank said it would hold an emergency meeting Tuesday morning “to discuss the level of the key rate.” The bank, which three weeks ago raised its benchmark interest rate a full percentage point, to 8.5 percent, has signaled in recent days it is willing to raise rates further to curb inflation.
The bank’s announcement appeared to slow the ruble’s depreciation. After weakening to about 102 to the dollar, it gained strength and crossed below 100 in a choppy trade.
The ruble’s value is down by about 25 percent against the dollar since the start of the year. Its decline has led to fears of rising inflation, and prompted Kremlin cheerleaders to lash out at the country’s financial authorities in state news media.
Maksim S. Oreshkin, an economic adviser to Mr. Putin, wrote in an opinion column for the Russian state news agency Tass on Monday that the “main source of ruble weakening and inflation acceleration is loose monetary policy,” and that the Russian central bank had “all the necessary tools to normalize the situation in the near future.”
“A weak ruble complicates the restructuring of the economy and negatively affects the real incomes of the population,” he wrote. “A strong ruble is in the interests of the Russian economy.”
Last week Vladimir Solovyov, a commentator on Russian television who champions the Kremlin, said the falling value of the ruble was a subject of global mockery.
On Thursday, in a move to bolster the ruble, Russia’s central bank said it would halt its purchases of foreign currency for the remainder of the year.
On Monday morning, it followed that up with a statement to Interfax saying that it “admits the possibility of raising the key rate at the next meetings.” By the afternoon, after the ruble continued to weaken, came the announcement of a meeting on Tuesday morning, a month ahead of the bank’s next scheduled rate-setting meeting on Sept. 15.
Russia’s annual rate of inflation reached 4.3 percent in July, and the central bank forecast that it could rise to as high as 6 percent by the end of the year.
The concerns over the ruble and inflation are the latest squall of financial volatility unleashed by Mr. Putin’s war against Ukraine. The government’s widening budget deficits are also raising concerns about the sustainability of Russia’s intense spending on the war.
Despite these challenges, Russia’s economy grew 4.9 percent in the April-to-June period compared with a year earlier, the government said Friday, a better-than-expected result and the country’s first yearly gain in economic growth since the start of the war in Ukraine.
In July, the International Monetary Fund raised its forecast for Russia’s economic growth in 2023 to 1.5 percent, from 0.7 percent. In 2022, the country’s gross domestic product shrank 2.1 percent. Russia’s growth has been largely driven by state spending on the war effort, which has fueled inflation and driven up budget deficits.
After invading Ukraine in February 2022, Russia struggled to plug holes in its economy caused by an onslaught of Western sanctions and an exodus of capital and assets, while the ruble slipped to as low as 135 per dollar. But a spike in oil prices and falling imports helped the ruble recover and led to a record trade surplus of $221 billion in 2022.
This year, the surplus has shrunk and oil revenues have fallen, because of a Western embargo and a price cap.
Oleg Matsnev contributed reporting.