The unexpected two-point rate increase raises borrowing prices for the fourth time in a row.

Globally, the rate of price increases has been rapid, owing in part to Russia’s invasion of Ukraine. In Russia, inflation reached 6% in September.

Russia has also raised government spending as it pours resources into its war machine.

The Bank of Russia, the country’s central bank, has boosted interest rates by 7.5 percentage points since July in order to return inflation to its 4% target.

This includes an unexpected emergency rate increase in August, when the rouble fell past 100 to the dollar and the Kremlin advocated for tighter monetary policy.

“Current inflationary pressures have significantly increased to a level above the Bank of Russia’s expectations,” the central bank stated on Friday.

Demand for products and services was surpassing supply, and financing was expanding rapidly, according to the report.

After the supply chain was interrupted by the coronavirus epidemic, Russia’s invasion of Ukraine in February 2022 affected global food supplies and drove up energy costs.

Food and energy price inflation have been important contributors to global price increases.

The Russian economy has also been under pressure as imports have risen faster than exports and military spending for the Ukraine war has increased.

Western sanctions were imposed on Russia in response to its aggression against Ukraine.

The rouble plunged after the war began, but it was supported by capital controls and oil and gas exports.

However, since the conflict began, the currency has lost around a fifth of its overall value against the US dollar.

The Russian rouble has dropped to a 16-month low.
There is no need to panic about the rouble, but its slide will impact Russians.