Russia's central bank hiked interest rates to 21 percent on Friday, taking borrowing costs to their highest level in more than 20 years amid surging inflation.
The rise takes rates above an emergency level introduced in February 2022 -- just after Moscow ordered troops into Ukraine -- and to their highest since 2003.
"Further tightening of monetary policy is required to ensure the return of inflation to the target and reduce inflation expectations," the bank said in a statement announcing the increase.
The bank directly blamed high government spending for inflation and said it could hike rates yet again if the pace of price rises does not cool.
"Additional fiscal spending and the related expansion of the federal budget deficit in 2024 have pro-inflationary effects," it said.
Inflation has surged amid a massive increase in government spending on the Ukraine offensive that has triggered labour shortages across the economy. Price rises were running at 8.6 percent on an annual basis in September, more than double the official 4.0-percent target.
Russian lawmakers voted Thursday to increase defence expenditure by almost 30 percent next year, another sign Moscow is not planning to halt its spending on the offensive, grinding through its third year, anytime soon.