Russia Raises Key Rate to Record 21% as Inflation Persists
- Central bank increases benchmark rate by 200 basis points
- War spending complicates efforts to curtail price growth
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The Bank of Russia hiked its key interest rate to a record high, surpassing the level it imposed after President Vladimir Putin ordered the invasion of Ukraine, and signaled future tightening was possible as policymakers grapple with persistent inflation.
The central bank raised the benchmark by 200 basis points to 21% on Friday, double the move predicted by most economists surveyed by Bloomberg. Two out of 13 analysts had projected a hold. Price growth continues to run at more than twice the central bank’s 4% target.