Cold Comfort

Russia’s central bank surprised economists Friday by hiking interest rates 1.5 percent, which was more than many expected, but it might take much more to stop the ruble’s downward march.

The Bank of Russia intervened to raise rates from 8 percent to 9.5 percent in an attempt to arrest rising inflation and keep the ruble from sliding further after it hit new lows against the dollar this week. It’s down almost 21 percent against the dollar since the beginning of the year.

In the face of Western sanctions and falling oil prices, Russia has had to spend $60 billion to prop up the ruble, including $28 billion in the past month.

The ruble rallied Friday on the interest rate announcement, but then started falling again before leveling off at 43 rubles to the dollar, raising the prospect of further intervention.

"Market reaction suggests that they will need to do more — which could well push the Russian economy formally into recession," Tim Ash, the head of emerging-market research at Standard Bank, said in an email.

Plummeting currency is only one of a long list of Russian woes. Growth, inflation, and capital flight of as much as $100 billion are also plaguing the country’s economy.

Sanctions from the United States and Europe, a penalty for Russia’s annexation of Crimea and military support of separatists in eastern Ukraine, have hurt the country’s growth prospects. Falling prices for oil, Russia’s main export, have also taken a toll. The central bank warned Friday that growth for the next two quarters will be near zero after just 0.2 percent growth in the third quarter this year.

Inflation has also risen sharply, in part because of Russia’s retaliation against sanctions in the form of a ban on Western food imports. The central bank said Friday that prices for food rose 11.4 percent in September after rising 10.3 percent in August, the month the ban went into effect.

Western sanctions have also taken a toll on individuals and companies relegated to the blacklist. Treasury Department officials described Bank Rossiya as President Vladimir’s personal bank when they listed it in April. Sanctions have cost the bank $21 million, according to the Wall Street Journal. Other financiers close to Putin have fared better, managing to escape sanctions. Oil giant Rosneft, restricted from seeking financing in Western markets, has had to lay off staff and sell stakes in Siberian oil fields in order to cope with being cut off.

Although Western efforts to damage the Russian economy have made their mark, there has been little progress on the end goal of sanctions: getting Russia out of Ukraine. A Sept. 5 cease-fire has left a large part of eastern Ukraine in the hands of pro-Russian rebels. The longer those lines of demarcation remain in place, the harder it may be for the government in Kiev to unseat the separatists and reunite the country. Ukraine and Russia took a big first step toward normalizing their relationship late Thursday by striking a natural gas deal. The two countries agreed to a $4.6 billion deal to secure a gas supply for the winter so that Ukrainians won’t freeze.

But tensions could flare again over a vote set for this weekend. Separatists in eastern Ukraine boycotted Kiev’s parliamentary election last Sunday and plan to hold their own this Sunday. The move is backed by Russia and condemned by the West, which could bring the simmering conflict back up to the boiling point.