The Russian Central Bank raised its key interest rate to 15% on Oct. 27 due to skyrocketing inflation and a declining ruble.
This marks the fourth time the bank has raised lending costs this year. Since July, the bank has raised rates by a total of 7.5 percentage points. The latest spike represents an increase of 200 basis points.
"Current inflationary pressures have significantly increased to a level above the Bank of Russia's expectations," the bank said in a statement.
The announcement comes a day after Russian lawmakers approved a 68% increase in military spending for 2024.
Russia previously announced an emergency rate hike on Aug. 15, raising the interest rate to 12% after the ruble fell to its lowest point since the start of Russia's full-scale war.
Russia's war against Ukraine has helped drive price inflation globally, in part due to disruptions to food and energy supplies. But severe Western sanctions have isolated Russia's economy, while government spending continues to climb.
“Steadily rising domestic demand is increasingly exceeding the capabilities to expand the production of goods and the provision of services. Inflation expectations remain elevated. Lending growth paces are invariably high,” the bank said.