The Russian central bank on Friday decided to raise its key rate to 9.5%, against 8% previously, as the ruble continues to fall to record low against the euro and the dollar, weighed down by Western economic sanctions.
In a statement issued after its monthly meeting, the Bank of Russia recognizes that in September and October, the external conditions have changed considerably, oil prices have fallen significantly while Western sanctions against Russian companies have gotten stronger.
This is the fourth time that the bank has decided to tighten its monetary policy since March amid the crisis in Ukraine and Western sanctions against Moscow.
The bank also said that it will continue to take measures to slow inflation.
This is caused mainly by the increase in food prices, which rose at a faster pace than expected in October and which will remain above 8% at the end of the first quarter of 2015, the Bank warned.
The Bank of Russia will continue to take measures to stabilize inflation and to slowdown consumer prices, the bank officials say.
Meanwhile, Russian economic growth will be close to zero in the fourth quarter of 2014 and first quarter of 2015, according to the bank.
After the announcement of the increase in interest rates by the Bank, the Moscow Stock Exchange was up 1.36%, while the ruble evolved slightly higher against the euro (53 rubles) and the dollar (42.24 rubles).
The next scheduled meeting of the Bank on rates will be held on December 11.