Russia raises rates to combat inflation

Moscow: Russia’s central bank unexpectedly increased its benchmark rate for the second time this year to quell inflation.

Bank Rossii raised the refinancing rate to 8.25% from 8%. Policy makers in Moscow also increased the deposit rate a quarter point to 3.25% and the overnight auction-based repurchase rate by the same amount to 5.5%. The change is effective from May 3.

The inflation rate has been above the central bank’s target of 6%-7% for this year since October, driven by rising food and fuel prices. The ECB lifted interest rates this month for the first time in almost three years, while regulators in Brazil, India and China raised borrowing costs at least four times in the past year.