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Ruble drops as Russian PM calls for interest rate cuts

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Ruble drops as Russian PM calls for interest rate cuts

Russian Prime Minister Dmitry Medvedev called on the country's central bank to cut interest rates to fuel economic expansion, sending the ruble to its lowest level since 2016.

Medvedev said at a finance ministry conference that the Central Bank of the Russian Federation needs to "move from neutral credit regulation to stimulating [growth]", the Financial Times reported.

"Even despite all the success we've had in limiting inflation, rates are still quite high and in that sense we are counting on the Bank of Russia's active position on that issue," Medvedev was quoted as saying in the report.

The ruble dropped as much as 1.9% following Medvedev's remarks. It was trading at 69.38 to the dollar at 1:17 p.m. ET.

Medvedev's comments differed with those of central bank Governor Elvira Nabiullina, who had hinted at the possibility of raising the bank's key rate next week or keeping it at 7.25%.

The head of the central bank's monetary policy department, Alexei Zabotkin, said some factors in favor of a rate hike have emerged, Reuters reported.

The ruble also weakened amid increased geopolitical tensions as the U.S., Canada, Germany and France backed the U.K.'s assessment that Russian officers were behind a nerve-agent attack on a former Russian spy and his daughter earlier this year.