Russia hikes interest rates to combat high inflation

The central bank's decision to raise the interest rate from 18% to 19% reflects ongoing economic strains fueled by military expenditures and high inflation.

Moscow's military spending has strained the economy, driving up wages while outpacing the country's ability to produce sufficient goods and services amidst high inflation.

The central bank highlighted that domestic demand growth significantly exceeds the capacity to expand supply, contributing to inflation that the bank aims to control.

With inflation currently at 9.1%, the bank is targeting a return to 4% by 2025, indicating the high stakes involved in managing the economy.

Read at euronews