Russian Central Bank on Friday hiked its key interest rate for the first time in more than a year amid fears that a weakening ruble will drive up inflation in the country.

The bank raised its benchmark rate from 7.5 percent to 8.5 percent, as analyst said it was higher than expected.

"Inflation expectations have risen. Domestic demand trends and the depreciation of the ruble since the beginning of 2023 significantly amplify pro-inflationary risks," the central bank said in a statement.

Days after Russia launched its Ukraine offensive in February 2022, the bank radically hiked the rate to 20 percent as Russia's economy was hit by sweeping Western sanctions.

Reassured by the resilience of the Russian economy, policymakers gradually cut the rate to 7.5 percent, leaving it at that level since September 2022.

Similarly, United Kingdom research group Capital Economics said the hike was "much larger than expected."

It "underscores policymakers' concerns about inflation risks," the research group said.

The ruble's recent fall pushed the bank to act to avoid soaring inflation like in spring last year when it reached a high of 17.8 percent.

Inflation in Russia stood at 3.25 percent in June, according to the country's statistics agency Rosstat.