Russian dep minister: rate hike will increase recession risk -report

MOSCOW, April 25 Fri Apr 25, 2014 1:56pm EDT

MOSCOW, April 25 (Reuters) - Russia's 50 basis point rise in interest rates earlier on Friday will increase the risk of recession more than it will lower inflation, Deputy Economy Minister Andrei Klepach was quoted as saying by Interfax news agency.

The central bank surprised markets by hiking the key one-week minimum auction repo rate to 7.5 percent due to increased inflation risks.

"The rate rise will not so much lower inflation as slow growth further and increase the probability not of stagnation but of recession," Interfax quoted Klepach as saying. (Reporting by Nigel Stephenson; Editing by Steve Gutterman)

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