Russia hikes interest rate amid inflation risk

MOSCOW (AP) -- Russia's Central Bank has unexpectedly raised its key interest rate in an effort to stem inflation as the country begins to feel the impact of its policies in Ukraine.

The Central Bank said Friday it has increased its one-week auction rate by 0.5 percentage points to 7.5 percent. The Russian ruble has fallen to record lows in recent weeks amid concerns over the Ukrainian crisis — a weaker currency tends to push inflation up.

Moscow in March recognized a hastily called referendum in Ukraine's Black Sea peninsula of Crimea and annexed it weeks later, attracting condemnation of the West as well some sanctions.

The bank said it does not expect to cut rates again in coming months and hopes Friday's hike will keep inflation under 6 percent this year.