Russian Central Bank keeps interest rates unchanged at 16%

Russia’s central bank kept interest rates steady on Friday, despite inflation rising above government plans and repeated warnings that rising military spending is weighing on the economy.

The bank kept the interest rate at 16%, it said in a statement, but indicated that it may raise lending costs in the future unless the pace of price increases declines.

Inflation currently stands at 8.2% year-on-year, more than double the central bank’s target of 4%.

The bank said that returning inflation to the target will require a much longer period of maintaining tight monetary restrictions in the economy, adding that the possibility of raising interest rates will remain open.