Vladimir Putin is facing growing criticism from Russian businesses as sanctions hit firms amid the country's war with Ukraine

       A report from the UK's Ministry of Defence has stated: "Criticism of high interest rates is growing amongst Russian business."

       The assessment added: "However inflationary pressures are also likely intensifying, in part due to the recent depreciation of the ruble."

       It comes after, on December 20, the Russian Central Bank (CBR) decided to hold interest rates at 21%.

       British officials say this marks a shift from its recent approach to tackling inflation, as at its last meeting in October 2024, the CBR hiked interest rates from 19% to 21%.

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       This was the highest rate since the beginning of the war in Ukraine in 2022.

       The MoD added: "In November 2024, the ruble depreciated to its lowest rate against the US dollar since the invasion of Ukraine in 2022 (114 per US dollar).

       "The drop in the ruble's value was almost certainly driven by the announcement of sanctions on Gazprombank, followed by the publication of economic statistics indicating continued overheating of the Russian economy.

       "In response, the CBR announced it would cease the purchase of foreign currencies until 2025."

       Although, the ruble remained above 100 to the US dollar until December 20, leading to wide market expectations of another interest rate hike.

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       Experts believe that the CBR's decision to hold interest rates at the current level will likely add to the imbalances in the Russian economy.

       This is due to the inflationary effects of the depreciation, labour shortages and high government spending.

       It comes as Putin has suffered another embarrassing blow after Russia reportedly lost nearly 1,400 soldiers on the first day of 2025.

       Ukraine's military authorities said Russia endured a staggering 1,370 casualties on January 1, consisting of both fatalities and injuries.

       The official announcement was posted on social media platform X alongside a quote from science fiction writer Arthur C Clarke: "The limits of the possible can only be defined by going beyond them into the impossible."