MOSCOW (dpa-AFX) - Russia's central bank raised its key interest rate Friday, defying expectations that the rate will be left unchanged, citing higher than forecast inflation and a faster than expected recovery in domestic demand.
The Board of Directors decided to increase the key rate by 25 basis points to 4.50 percent, the Bank of Russia said in a statement. Economists had expected the rate to remain at 4.25 percent.
Inflation expectations of households and businesses remain elevated and the balance of risks has shifted towards proinflationary ones, the central bank said.
The bank also said that it 'holds open the prospect of further increases in the key rate at its upcoming meetings.'
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