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