The Russian ruble hit a record low against the dollar on the back of a slew of new sanctions and penalties imposed on Russia by Europe.
The central bank said the rate hike was designed to offset the risk of ruble depreciation and inflation. The ruble fell as far as 119.50 per dollar, down 30% from Friday's close.
The bank said that it would be freeing more than $8 billion in local bank reserves. Over the weekend, the U.S., European allies and Canada agreed to cut off key Russian banks from the interbank messaging system, SWIFT, which connects more than 11,000 banks and financial institutions in over 200 countries and territories. The EU said it was closing its airspace to Russian planes.
The EU has ever deployed the strongest measures against Russia, but this is the first time it has been used as Russian forces are in Ukraine. It follows several days of heavy shelling and missile strikes in major urban centers including Ukraine's two largest cities, which have a population of nearly 5 million people.
The Ukrainian defense ministry said on Sunday that Ukrainian forces have held back the Russian advances and are in control of the two cities.
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