Russia’s central bank on Friday raised its key interest rate by two percentage points to a record-high 21% in an effort to stem growing inflation as massive government spending on the military amid the fighting in Ukraine strains the economy’s capacity to produce goods and services and drives up workers’ wages.

Russia's central bank raised its key interest rate to a record high on Friday as inflationary pressure continues in the country. The Bank of Russia raised the benchmark rate by 200 basis points to 21%,

The Bank of Russia lifted borrowing costs to the highest level since the invasion of Ukraine as it struggles to cool an overheating economy.