Russia Raises Interest Rate to 21 Percent, Its Highest in Decades

Published On Oct 25, 2024, 10:43 AM

Russia's central bank has increased its benchmark interest rate to 21%, the highest in over 20 years, to combat rising inflation driven by unprecedented military spending and recruitment costs due to the war in Ukraine. Central bank president Elvira Nabiullina indicated that inflation is expected to average 8.8% this year, far exceeding healthy levels. The economic impact of the war has led to labor shortages and rising wages, which are further fueling price increases. Despite these financial pressures, the Kremlin remains committed to escalating war expenditures.