Russia's central bank on Friday raised its key interest rate by a quarter of a percentage point to 7.5 percent, citing increased inflation risks and adding it is considering further hikes.

Elvira Nabiullina, governor of Russia's central bank, pauses during a news conference following an interest rate announcement in Moscow, Russia, on June 15, 2018. (Photo: VCG)

The rate hike, Russia's first since 2014, comes with emerging markets such as Turkey seeing their currencies in crisis, and as the West threatens fresh sanctions.

The bank had progressively cut the rate until March last year, and then kept it stable from then onwards.

Friday's decision defied analysts' expectations that it would stay unchanged.

The Bank of Russia said in a statement that it made the rate raise because "changes in external conditions" since its last such meeting "have significantly increased pro-inflationary risks."

"The Bank of Russia will consider the necessity of further increases in the key rate, taking into account inflation and economic dynamics against the forecast, as well as risks posed by external conditions and the reaction of financial markets," the bank added.

The bank had kept a tight rein on the key lending rate after pushing it up to 17 percent in December 2014 in an emergency move aimed at stemming a dramatic ruble drop amid falling oil prices and Western sanctions.

The central bank's latest rate hike immediately pushed up the value of the ruble against the dollar and euro after it had fallen at the beginning of this week due as the West introduced fresh sanctions and the Turkish lira plunged.

The central bank's next meeting to discuss the interest rate is set for October 26.