Vladimir Putin is facing a Kremlin rebellion over his handling of the economy, as anger erupts among key officials over high interest rates.
Russia‘s Central Bank was forced to hike rates by two points to a historic high of 21 percent last week.
The current rate is even higher than that which was imposed in the immediate aftermath of Putin’s invasion of Ukraine, when Russia was hit by brutal Western sanctions.
The move was prompted by a jump in inflation to 9.8 percent from 7.7 percent, amid a surge in military spending.
The decision has provoked a furious backlash from Russian politicians, who have called for the resignation of the head of the Central Bank – Elvira Nabiullina.
Sergei Mironov, the leader of the party “A Just Russia – For Truth” pointed out that Russian interest rates were now on a par with those in Angola and Zimbabwe.
“This is the kind of company Nabiullina brought us to,” he fumed. “Sabotage, but she can’t do anything else.
“This lady will ruin our economy. Only her resignation will help!”
Nabiullina is a close Putin ally and worked as his economic adviser before being appointed as head of the Central Bank in 2013.
She has skilfully navigated the Russian economy through the various crises caused by Russia‘s war in Ukraine.
Her hawkish monetary policies have repeatedly saved the ruble and kept the country’s economy afloat.
Her successful stewardship of the economy has enabled Putin to pursue his war in Ukraine despite the impact of sanctions.
John Heagney, a UK consultant and economic analyst, noted that Russia‘s economy was in serious trouble.
“The evil state of Russia is crashing, the Russian central bank raises interest rates to highest level in 21 years from 19% to 21% percent as inflation reaches 9.8%.
“The size of the Russian economy based on GDP is clearly demonstrated by this chart.”
The chart produced by the Centre for Strategic Communication and Information Security shows the value of Russia‘s economy as USD1.7 trillion. This puts it far behind the UK (USD3.4 trillion) and the US (USD25.3 trillion).
Mironov’s remarks come amid an increasing shortage in staple food products, such as butter.
The price of butter has risen by an astonishing 20 percent due to its scarcity, and has led to a spate of thefts from supermarkets, forcing management to keep the product under lock and key.