Russia's central bank unexpectedly raised its benchmark interest rate by 100 basis points to 19% on Friday, saying that inflation remained stubbornly high and action was needed to reduce it.

Russia’s central bank has raised its key interest rate by a full percentage point to 19% to combat high inflation as government spending on the military strains the economy’s capacity to produce goods

The reduction, to 3.5 percent from 3.75 percent, comes as inflation has slowed and the bank faces pressure to bolster the region’s flagging economy.