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Russia's Central Bank hikes interest rate as inflation soars

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Inflation News

Russia,General News,Europe

Russia’s Central Bank has raised its key lending rate to the highest level in more than two years to stem soaring inflation in an overheated economy hit by Western sanctions in response to Moscow’s military action in Ukraine. The bank on Friday raised the rate by 200 basis points to 18.

MOSCOW — Russia’s Central Bank on Friday raised its key lending rate to its highest level in more than two years to stem soaring inflation in an overheated economy hit by Western sanctions in response to Moscow’s military action in Ukraine.

“Growth in domestic demand is still outstripping the capabilities to expand the supply of goods and services,” the bank said in a statement. “For inflation to begin decreasing again, monetary policy needs to be tightened further.” It said annual inflation grew from 8.6% in June to 9.0% in July, reflecting an increase in utility costs that took effect starting this month.

 

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