Accessibility links

Breaking News

Russia Raises Key Interest Rate Amid Ukraine Tensions

Russia's central bank has unexpectedly raised its main interest rate in a bid to stem inflation and support the ruble amid tensions over Ukraine.

The Bank of Russia said on July 25 it has increased its main interest rate by a half point to 8.0 percent.

In an apparent reference to uncertainty generated by the Ukraine crisis and Western sanctions against Russian companies and officials, it said "heightened geopolitical tensions" were pushing down the ruble, increasing the risk of inflation.

The bank said it will continue raising the key interest rate if high inflation risks persist.

Higher interest rates tend to support the strength of a currency but can hurt economic growth.

The interest rate was 5.5 percent at the beginning of the year.

Based on reporting by AP and AFP