By Paul Hannon 
 

Russia's central bank on Friday raised its key interest rate for the second time in four months, and said it may move again to head off rising inflationary pressures caused in part by the ruble's depreciation this year.

The Bank of Russia lifted its key rate to 7.75% from 7.5%, having previously raised borrowing costs in September, a shift in policy that brought an end to a series of cuts dating back to the end of 2014.

In a statement, the central bank said it would "consider the necessity of further increases in the key rate," pointing to an expected pickup in inflation during 2019 that in part reflects a planned rise in sales taxes from January.

The central bank aims to keep the annual rate of inflation at 4%, but now expects consumer prices to be rising by between 5% and 5.5% at the end of next year, even after taking account of the impact of Friday's rate rise on the economy. It expects inflation to fall back to 4% by the end of 2020.

Policy makers said future moves will in part depend on "external conditions and the reaction of financial markets," likely a reference to the possibility that capital will continue to flow out of emerging markets if the U.S. Federal Reserve continues to lift its key interest rate.

Write to Paul Hannon at paul.hannon@wsj.com.

(END) Dow Jones Newswires

December 14, 2018 06:35 ET (11:35 GMT)