MOSCOW — In a decisive move to combat soaring inflation, the Central Bank of Russia has raised its interest rates to a historic high of 21%.

This significant increase reflects the ongoing economic pressures exacerbated by heightened military expenditures amid recent geopolitical tensions.

The bank’s decision aims to stabilize prices and rein in inflation that has been spurred on by a surge in government spending allocated for defense sectors.

Analysts anticipate that this dramatic rate hike may have profound implications for the nation’s economy, impacting not only consumer borrowing costs but also broader economic growth prospects.

As Russia navigates these challenges, the central bank faces the difficult task of balancing inflation control while supporting the economy under escalating military demands.

The effects of the recent monetary policy shift will likely unfold in the coming months, influencing both consumers and businesses within the Russian financial landscape.

Investors and stakeholders are closely monitoring the situation, seeking insights on how the Russian economy will adapt to this intensified financial stance.