Ammon News - Russia's central bank raised its key interest rate by 100 basis points to 16% on Friday, hiking borrowing costs for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was now close to completion.

The bank has raised rates by 850 basis points since July, including an emergency hike in August after the Kremlin called for tighter monetary policy when the rouble tumbled past 100 to the dollar. It has since recovered to just over 90.

The bank said pro-inflationary risks over the medium-term horizon remained substantial and warned that stabilising inflation near its 4% target would require high rates for a long time. Higher-than-expected government spending would also raise inflation risks, it said.

The central bank reiterated its expectation that inflation would end the year at the upper end of its 7-7.5% forecast range.

Reuters