The Bank of Russia has increased its key interest rate to a new high of 21%, which is a significant rise of 200 basis points. This decision comes as the central bank deals with ongoing inflation that is more than double its target of 4%.

The latest increase is higher than the rate set after the invasion of Ukraine, which shows the severity of the economic challenges the country is facing. Economists had expected a smaller increase, with most predicting a rise of 100 basis points, while a minority believed the rate would remain at 19%. The persistent price growth highlights the difficulties in stabilizing the economy amidst geopolitical tensions and domestic pressures.