Russia’s central bank has taken an unusual step by raising interest rates to 21%, the highest in two decades. This move is a departure from what one would expect during times of war, when economic activity is typically suppressed. The decision comes as markets anticipate further rate hikes, potentially reaching 23% by year-end.
The shift raises concerns about Russia’s reliance on China and its impact on the country’s economy. Most central banks globally are cutting interest rates to boost economic growth, but not Russia. Economists argue that existing measures of economic discomfort are failing to predict elections, highlighting the need for new indicators.
Despite global market volatility, financial markets remain oddly calm. Indicators of market turmoil have decreased significantly. Meanwhile, experts discuss ways to fund sustainable development in poor countries without reinventing the wheel by replicating successful models from rich nations.
As the US prepares to reshape its trade, capital, and labor flows under a new administration, the next treasury secretary’s views are also being scrutinized. We’ll examine the top contenders for this key position.
Source: https://www.economist.com/finance-and-economics/2024/11/18/vladimir-putin-is-in-a-painful-economic-bind