MOSCOW — A large interest-rate increase by Russia's Central Bank on Tuesday failed to stem the selling pressure on the ruble, which slid another 20 percent to new historic lows.
The surprise Central Bank decision to raise the rate to 17 percent from 10.5 percent came in the middle of the night Tuesday. The ruble has fallen sharply in recent weeks as a result of sliding oil prices as well as the pressure from Western sanctions over Russia's involvement in Ukraine.
The move is intended to make it more attractive for currency traders to hold onto their rubles — doing so gives them a major return, certainly in comparison with many other currencies, such as the dollar, for which the interest rate returns are near zero percent.