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Russia central bank in surprisingly big rate hike

Updated at: 10/31/2014 7:52 AM
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(AP) MOSCOW - MOSCOW (AP) — Russia's central bank has raised its main interest rate by more than anticipated as it tries to stem the ruble's fall.

The bank on Friday lifted its main rate from 8 percent to 9.5 percent in a move reflecting the bank's concern over the plummeting currency. The ruble fell to an all-time low of 43.4 earlier this week, but has recovered somewhat trading at around 42 rubles.

The bank has been quickly eating through its hard currency reserves, spending billions of dollars to support the ruble.

Since March, it has raised the rate from 5.5 percent, but the national currency has kept falling amid plummeting oil prices and tensions over Ukraine.

The ruble's sharp fall this year has prompted a surge in inflation that may erode President Vladimir Putin's popularity.

(Copyright 2014 by The Associated Press. All Rights Reserved.)