Bank of Russia hikes key rate by 200 bps to 15
Inflationary pressures above expectations, says c.bank
Budget was 39;significant factor39; in decision, says governor
This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine

MOSCOW, Oct 27 Reuters The Bank of Russia hiked interest rates by a higher than expected 200 basis points to 15 on Friday, raising borrowing costs for the fourth meeting running in response to a weak rouble, stubborn inflation and increasing budget spending.

The central bank has raised rates by 750 basis points since July, including an unscheduled emergency hike in August as the rouble tumbled past 100 to the dollar and the Kremlin called for tighter monetary policy.

Current inflationary pressures have significantly increased to a level above the Bank of Russia39;s expectations, it said in a statement, pointing to domestic demand outpacing the provision of goods and services, and high lending growth.

Governor Elvira Nabiullina said the bank had also considered hiking by 100 or 150 basis points, and said the rate could be held or raised further this year. The next meeting is scheduled for Dec. 15.

Nabiullina also said the budget was a significant factor in Friday39;s decision.

Russia is increasing government spending, pouring cash into the defence sector to ramp up military production and prosecute what it calls its special military operation in Ukraine.

The updated mediumterm parameters…