Russia hikes interest rate

Moscow: Russia´s central bank on Friday raised its interest rate by 100 basis points to 6.5 percent -- its biggest increase since a 2014 currency crisis -- as the country battles soaring food prices.

The Russian economy was hard-hit by the coronavirus pandemic and the 2020 oil price crisis, and authorities are under pressure following a leap in prices for staple goods such as sugar, sunflower oil and eggs.

"Inflation is developing above the Bank of Russia´s forecast," it said in a statement, adding that the increase in its key rate aimed to "constrain this risk" and return inflation to 4.0 percent.

According to the bank´s estimates, the Russian economy reached its pre-pandemic level in the second quarter of 2021.

However, the "steady growth in domestic demand exceeds production expansion capacity in a wide range of sectors," the bank added.