By Olga Razumovskaya 

MOSCOW--The Russian central bank on Friday raised its key interest rate to 8% from 7.5%, and warned that if inflation risks remain high in Russia the bank will continue to increase its key rates.

The Bank of Russia was widely expected to keep rates on hold, having raised them twice since early March when the Russian annexation of Crimea boosted capital flight, causing the ruble to tumble to a record low and inflation to jump.

The central bank cited inflation risks for its decision. The risks have increased due to a combination of factors, including rising geopolitical tensions and its potential impact on the ruble exchange rate dynamics, as well as potential changes in tax and tariff policy, the bank said in its statement.

"The buildup of these risks will lead to inflation expectations remaining heightened and creates threats of inflation exceeding the target in the coming years," the regulator added.

Write to Olga Razumovskaya at olga.razumovskaya@wsj.com