Russia's Central Bank Raises Key Interest Rate Amid Economic Strain

Russia's central bank raised its key interest rate to 19% to combat high inflation driven by increased military spending. Despite sanctions, Russia's economy is growing steadily, supported by high government spending and oil exports. The bank aims for inflation reduction by 2025.

Russia's central bank has raised its key interest rate by a full percentage point to 19 percent in a bid to combat high inflation driven by substantial government military spending.

Growth in domestic demand continues to outpace supply capabilities, the central bank noted, indicating more rate increases might be forthcoming to bring inflation down from 9.1 percent to their 4 percent target by 2025.

Despite sanctions from Western nations opposing the Kremlin's military operations in Ukraine, Russia's economy is showing robust growth, bolstered by large government expenditures and strong oil export revenues.

(With inputs from agencies.)