Russia raises key interest rate

21 March, 2021 12:00 AM printer

MOSCOW: Russia's central bank on Friday raised its key interest rate to 4.5 percent in a surprise move, as authorities struggle to cap soaring food prices and the threat of new sanctions looms.

Russia in recent months has faced accelerating inflation and a weak ruble, with authorities coming under pressure as the price of basic goods increased during the coronavirus pandemic, reports AFP.

"The fast recovery of demand and elevated inflationary pressure call for a return to neutral monetary policy," the central bank said in a statement, adding that further hikes could follow.

The increase by 0.25 percentage points -- the first since late 2018 -- surprised many analysts.