Russia, China surprise markets with central bank moves

Two global central banks made surprising decisions overnight: China slashed its policy rate while Russia hiked its own at an emergency gathering of central banking officials.

Driving the news: Russia's central bank raised rates by 3.5 percentage points, to 12% — an abrupt decision meant to address the sharp decline in the nation's currency.

• The rouble is under pressure thanks, in part, to sanctions from Western nations that have crushed export revenues and higher military spending.

Meanwhile, China unexpectedly cut its key rates in an effort to shore up its economy facing a lackluster recovery from its zero-COVID lockdown measures.

• A slate of data overnight paints a disappointing picture: Consumer spending is slowing, while industrial production rose by less than economists anticipated.
• The country also said it would suspend publishing data on youth unemployment. In June, that rate hit a record high, underscoring trouble in the labor market.

The bottom line: Different economic issues plague Russia and China. Still, the surprising moves show they are ramping up actions to stem intensifying issues roiling their economies.