Russia raises key rate amid Ukraine concerns

MOSCOW (AP) — Russia’s central bank has unexpectedly raised its key interest rate in a bid to stem inflation and support the currency as the country faces increasing economic pressure over its policies in Ukraine.

The bank said Friday it has lifted its one-week auction rate by 0.5 percentage points to 8 percent. The central bank cited “heightened geopolitical risks” that are likely to push down the Russian ruble, fueling consumer price inflation. Higher rates tend to support a currency but can hurt economic growth.

The rate has risen from 5.5 at the beginning of the year. That has helped support the ruble after a period of weakness, but growth is sliding.

The United States last week imposed tougher sanctions on Russia over its alleged unwillingness to help end the conflict in Ukraine.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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