The Bank of Russia delivered its biggest interest-rate increase since July and said more hikes were possible, surprising most analysts as inflation shows no sign of slowing.

       The ruble rallied by the most in almost half a year after the decision and yields surged.

       The Bank of Russia raised the rate 75 basis points to 7.5% Friday, its sixth straight hike. Only one economist in a survey of 44 had correctly forecast the move, with the rest expecting an increase between 25 basis points and 50 basis points.

       “The balance of risks for inflation is markedly tilted to the upside,” the central bank said in its statement. “This may bring about a more sustained deviation of inflation from the target.”

       With price growth unyielding, Bank of Russia Governor Elvira Nabiullina has resorted to bold moves, even as economic growth starts to slow. The central bank has now boosted rates by a total of 325 basis points this year in an effort to contain inflation, which is running nearly double its target. A slowdown in the economic recovery may be further intensified by new Covid-19 restrictions imposed by authorities this week.

       “The decision is sharper than expected, intended to signal to the market that the Bank of Russia is really concerned with the spike in CPI and inflationary expectations,” said Dmitry Dolgin, chief economist at ING Bank in Moscow. “Inflationary risks are prioritized over the risks to economic activity due to the new wave of Covid in Russia.”

       The ruble extended gains after the decision, advancing as much as 1.8% against the the dollar to 69.8150, its largest intraday rise since May 7. Expectations of more rate increases, along with rising oil prices, have helped make the ruble one of the top-three performers among major emerging markets so far this month.

       Bond yields jumped 14 basis points to 7.75%.

       Inflation is still running near six-year highs as global price pressures add to local ones fueled by a delayed harvest. Even if some of those factors prove temporary, the central bank has warned that they could feed into a lasting increase in inflationary expectations, which rose again in October to 13.6%.

       After Brazil, Russia has been one of the most aggressive among emerging markets in raising rates to combat rising inflation this year. By contrast, Turkey this week surprised with a big cut, pushing the lira lower.

       Nabiullina will hold an online news briefing at 3 p.m. Moscow time. Follow our live blog here.

       --With assistance from Zoya Shilova and Scott Rose.