Russian Central Bank hikes interest rate to shore up ruble

Russia's Central Bank has hiked its key interest rate for the first time in nearly four years, moving to shore up the ruble amid increasing risks of U.S. sanctions.

It raised the rate to 7.5 percent from 7.25 percent Friday, saying the move is necessary to contain inflation risks stemming from a weak ruble. The Russian currency, which plummeted to its lowest levels in years this month amid the threat of more U.S. sanctions, strengthened on the rate hike.

The Central Bank also announced that it would suspend hard currency purchases for the country's reserves until the year's end in another move to ease the pressure on the ruble.

The rate hike has received a mixed reaction from observers, with some voicing concern that it would hamper Russia's economic recovery.