Russia Takes Action to Combat Inflation, Raises Interest Rates to 13%

Russia's Central Bank raised interest rates from 12% to 13% due to concerns about rising inflation and an overheating economy. The rate hike is the second in two months and comes as the Russian ruble remains weak against the US dollar. Inflation is currently running at 5.5%, above the Bank's target of 4%. The falling ruble has contributed to a rise in prices, while labor shortages are driving up wages. The Bank plans to maintain tight monetary policy to bring inflation back to target and may consider further rate hikes later this year. Some analysts believe that rate rises may have limited impact due to the government's increased spending on the war in Ukraine.