INSUBCONTINENT EXCLUSIVE:
Russia's Central Bank on Friday raised its key interest rate to 16%, announcing a fifth hike since summer in a bid to fight accelerating
inflation.The central bank has been grappling with the economic fallout of the offensive in Ukraine that includes Western sanctions, a surge
in government military spending and the call-up of hundreds of thousands of men."Current inflationary pressures remain high
explaining its decision.Higher interest rates are designed to sap demand by making it more expensive to borrow money and encouraging
consumers and businesses to save, not spend.Analysts expected the increase as the central bank repeatedly stated its priority to fight
the population.Central Bank chief Elvira Nabiullina said that Moscow's economy was working "almost at full capacity," warning of a risk of
"overheating.""Business lending is showing early signs of slowing, but is still growing at a record pace," she warned, as the bank is
seeking to limit subsidized loads believed to be driving inflation.The decision to raise the interest rate comes a week after Russian
President Vladimir Putin announced plans to run in tightly-controlled polls in 2024 to stay in the Kremlin until at least 2030.At his
end-of-year press conference Thursday Putin hailed the 2.9% unemployment rate "at an all-time low," calling it "a very good indicator of the
state of the economy."But analysts say the low employment rate is not a healthy sign but instead shows a shortage of recruits, with various
sectors struggling to fill posts.The mobilization of hundreds of thousands of men took them off the job market, while prompting many of the
most educated parts of the population to flee the country.The lack of manpower is driving up wages, as employers are forced to offer more
attractive salaries in order to recruit.While this has created a cycle of rising wages and prices, a rapid rise in military spending has
pushed the government into a deficit.
