Russia's central bank on Tuesday hiked its key interest rate from 8.5 to 12 percent, after the ruble crashed to a more than 16-month low against the dollar.
"This decision was taken in order to limit the risks to price stability," the central bank announced after an emergency meeting earlier in the day.
It warned that inflationary pressure was still rising, and said the bank risked missing its inflation target in 2024 if prices continued to increase at their current rate.
"In the case of a strengthening of pro-inflation risks, an additional increase of the key rate is possible," it later said, in comments published by Russian news agencies.
The bank is next scheduled to consider its key rate on September 15.
The ruble has shed around 30 percent of its value against the dollar since the start of the year, as Moscow grapples with falling export revenues, rising imports and higher military spending.
Inflation has also remained stubbornly high, despite the bank tightening monetary policy, with consumer prices rising 4.3 percent year-on-year in July.
Data from the Moscow Exchange showed the ruble sharply weakening against the dollar after the rate decision, before settling to trade around 98.19 at 13:34 local time (1034 GMT).
"A rate hike will not help the ruble much," economist Dmitry Polevoy cautioned in a post on social media.
He added that the ruble may continue to experience volatility, trading within the "normal" range of 85-95 rubles to the dollar.
On Monday the currency fell to more than 100 rubles to the dollar, prompting one Kremlin aide to publicly criticise "loose monetary policy" in an op-ed published in state media.
The decline in the ruble and creeping inflation has prompted fears ordinary Russians' standard of living could take a hit.
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