Russia's Central Bank Hikes Interest Rate to 19%

Russia's central bank raised its key interest rate to 19% to curb high inflation caused by surging domestic demand and government military spending. The central bank aims to lower inflation from 9.1% to 4% by 2025. Continued solid growth driven by oil exports and military spending is a contributing factor.

Russia's central bank has taken a significant step to curb soaring inflation, raising its key interest rate by a full percentage point to 19%.

The move comes in response to high domestic demand and government military spending, which is stretching the economy's capacity to produce goods and services.

While the economy shows strong growth due to oil export revenues and government expenditures, the central bank plans further rate hikes to bring inflation down from 9.1% to a target of 4% by 2025.

(With inputs from agencies.)