The central bank says further rate hikes possible
Inflation is not slowing down
Inflationary expectations highest since the start of the year
Key rate higher than at the start of the conflict in Ukraine

MOSCOW, Oct 25 Reuters Russia39;s central bank hiked its key interest rate by 200 basis points on Friday to 21, the highest level since the early years of President Vladimir Putin39;s rule, when Russia was recovering from the chaos that followed the collapse of the Soviet Union.

The move, driven by massive increases in state spending, especially on the military, also brings the rate above the level seen during the market panic at the start of what Russia calls its special military operation in Ukraine in February 2022.

The central bank said the hike was needed to fight inflation, currently at 8.4, adding that inflationary expectations among the public have reached their highest level since the start of the year.

Further tightening of monetary policy is required to ensure that inflation returns to target and to reduce inflation expectations, the regulator said.

Russia, which has just hosted a summit of the BRICS group of countries, has by far the highest key interest rate among the core BRICS members, who also include China, India, Brazil and South Africa.

The regulator said another hike was possible at its next policy meeting and also updated its inflation forecast for 2025 to 4.55.0, signalling that its 4 policy target was out of reach next year.

The central…