MOSCOW: Russia's central bank on Friday raised its interest rate for the fifth time in a row in an effort to curb soaring food prices with parliamentary elections coming up later this month.
Authorities are under pressure to rein in inflation following a leap in prices for staple goods ahead of the September 17-19 polls where the increasingly unpopular ruling United Russia party might struggle.
At a meeting on Friday, the Bank of Russia increased its key rate by 0.25 percentage points to 6.75 percent, saying inflation is still running above its target.
"The Bank of Russia's monetary policy stance is aimed to limit this risk and return inflation to 4 percent," the bank said, adding that more hikes could be in the pipeline.
The central bank said that as of September 6, inflation stood at 6.74 percent and was expected to return to 4-4.5 percent in 2022.
In August, 12-month inflation reached 6.7 percent, the highest level in five years.
The same month President Vladimir Putin announced cash handouts to pensioners and servicemen in an apparent bid to drum up support for United Russia.
After months of historically low inflation, consumer prices began to climb in March 2020, driven by a drop in the ruble's value in the midst of the coronavirus pandemic.
The central bank started raising its historically low rate the same month.
The central bank's next rate review meeting is scheduled for October 22.
In July, the central bank raised its interest rate by 1.0 percentage points to 6.5 percent -- its biggest increase since 2014.