The Russian Ruble drifted higher against the U.S. dollar in the European session on Friday, after Russia's central bank raised its key interest rate amid faster economic recovery and rising inflation.

The Board of Directors decided to increase the key rate to 5.50 percent from 5.00 percent, the Bank of Russia said in a statement.

The bank suggested that increased inflationary pressure together with recovery from the pandemic could lead to a more significant and prolonged upward deviation in inflation from the target. This creates the need for a further rate hike at the next meetings, the bank said.

The Russian Ruble climbed to 71.55 against the greenback, its highest level since July 2020. The pair had ended yesterday's deals at 72.07. Next key resistance for the Ruble is likely seen around the 70 level.

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