Bank of Russia lifts rate to counter sanctions bite

The Russian central bank moved on Friday to shield the country's economy from tightening Western sanctions over Ukraine, raising its main interest rate in a bid to forestall a resurgence of capital flight. The Bank of Russia surprises with a decision to raise its main rate by half point to 8.0 per cent. It said that "inflation risks have increased due to a combination of factors, including, inter alia, the aggravation of geopolitical tension and its potential impact on the ruble exchange rate dynamics." The increase was the third since March as the central bank began to tighten monetary policy when the Russian economy was buffeted by the uncertainty generated by the Ukraine crisis and Western sanctions, according to a news agency.