The Russian central bank increased the interest rate from 9.5% to 20% as the ruble plunged on Monday to a record low against the U.S. dollar as a result of severe sanctions placed on Russia due to the war in Ukraine.
Russia's central bank said the dramatic rate hike should help counter the rapid depreciation of the ruble for the time being.
Over the weekend, Russia's central bank also suspended the ability of foreigners to sell Russian stocks and securities to soften the blow to the Russian financial system.
The ruble crashed in early trading on Monday by more than 30% against the dollar.
To help ease pressure on the banking system, Russia's central bank will make available 733 billion rubles to local banks to prevent a liquidty crunch.
Western nations have agreed to block major Russian financial institutions from the SWIFT interbank messaging system, which interconnects banks in over 200 countries.
