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Russia’s central bank raised its key interest rate for the third time in two months on Friday as it grapples with higher inflation and a weaker ruble.

Inflation in Russia accelerated over the summer and has remained stubbornly high, with the central bank failing to meet its target of four percent.

The central bank said its board of directors decided to increase the key rate from 12 percent to 13 percent.

“Inflationary pressure in the Russian economy remains high,” the bank said in a statement.

The bank also pointed to the “depreciation of the ruble”, which has shed around 30 percent of its value against the dollar since the start of the year.

“The Bank of Russia will assess the feasibility of further increases of the key rate at its upcoming meetings,” it said.

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The central bank last hiked its key rate at an emergency meeting in August, a day after the ruble tumbled to a more than 16-month low against the dollar.

On Tuesday, President Vladimir Putin downplayed the weakening of the currency, which has been weighed down by lower export revenues and higher military spending in the wake of the conflict in Ukraine.

“This issue requires its own painstaking research by the central bank and the Russian government and financial authorities,” he said at the Eastern Economic Forum in Vladivostok.

Russian officials have largely shrugged off the economic effects of Moscow’s dragging offensive in Ukraine, despite an exodus of foreign companies and unprecedented Western sanctions.

Source: AFP