Russian central bank hikes key rate to fight inflation
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Russia's central bank raised its key interest rate to 18 percent on Friday, the sixth hike in just over a year as it seeks to tame soaring price rises; Governor Elvira Nabiullina said Russian businesses were facing higher costs and payment problems as the West puts pressure on Russia's trading partners to stop helping it circumvent sanctions; Domestic prices have risen fast since Moscow launched its full-scale military offensive against Ukraine in February 2022, as massive government spending and skyrocketing wages have pushed up demand across the economy; The interest rate was previously at 16 percent and Nabiullina kept open the possibility of further hikes; Nabiullina said the economy was showing stubborn signs of "overheating" and pointed to trading difficulties as another factor driving up inflation; The United States has threatened banks and firms in the likes of China, Turkey and the United Arab Emirates with harsh penalties -- so-called "secondary sanctions" -- if they help Russia import goods the West has sanctioned over the Ukraine conflict; Russia is set to spend almost nine percent of its GDP on defence and security this year, according to President Vladimir Putin -- a figure unprecedented since the days of the Soviet Union as the country ramps up arms production to fight in Ukraine; Moscow's federal budget has jumped almost 50 percent over the last three years -- from 24.8 trillion rubles ($289 billion) in 2021, before the Ukraine offensive, to a planned 36.6 trillion rubles ($427 billion) this year; Consumer prices are a sensitive topic in Russia, where many people have virtually no savings and memories of hyperinflation and economic instability run deep; The Kremlin said Thursday it was concerned by high levels of inflation and that "measures" were being implemented to tackle the problem.

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https://www.legit.ng/business-economy/economy/1604502-russian-central-bank-hikes-key-rate-fight-inflation/