Russia's Central Bank Raises Interest Rates to 19% to Curb Inflation

Russia’s central bank raised its key interest rate by a full percentage point to 19% to curb high inflation.

“Growth in domestic demand continues to significantly outpace capacity to expand the supply of goods and services,” the central bank said in a statement on Friday. It also left open the possibility of another rate hike to bring inflation back from its current 9.1% to the bank’s target of 4% in 2025.

Russia’s economy continues to show strong growth thanks to continued oil export revenues and government spending on goods, including the military.

The annual inflation rate was 9.05% in August, down slightly from 9.13% in July but still well above the central bank’s target of 4%, according to data from state statistics agency Rosstat.

The data comes a month after the agency said Russia's economic growth rate slowed in the second quarter of 2024, expanding by 4% compared to 5.4% in the first quarter.