MOSCOW. Sept 13 (Interfax) - The board of directors at the Central Bank of Russia (CBR) decided at a meeting on Thursday to increase both the refinancing rate and interest rates on CBR operations by a quarter of a percentage point as of September 14, the CBR's external and public relations department announced.

That will bump the refinancing rate up to 8.25%.

Most analysts surveyed by Interfax were not expecting the bank to change rates.

At a meeting on Thursday, the CBR board of directors decided to raise raises because of rising prices and expectations of inflation, which, in turn, raises risks of exceeding the bank's midterm inflation targets, also with consideration economic growth forecasts, the statement said.

Inflation growth in August and the start of September continued. According to the CBR's estimates, the annual growth rate for consumer prices came to 6.3% on September 10, which exceeds the upper end of the planned corridor set by the bank for this year. A key reason for the increase in the annual consumer inflation rate has been the speed up of prices for foodstuffs and the ongoing planned boost to regulator prices and tariffs. A significant source for inflation risks remains the worsening situation on the world and Russian foods markets with consideration of estimates for the main harvests this year, as well as the influence of these factors on inflation expectations. Furthermore, base inflation has steadily sped up over recent months. The figure reached 5.5% in august, which indicates monetary factors are becoming more important in inflation development, the CBR said.

The rate of investment growth in fixed capital continued in July and the annual retail turnover slowed down. At the same time, industrial production picked up and quite a positive mood among producers was maintained. The labor market situation, along with lending trends, the rate of which, despite signs of stabilization, remain high, creates the conditions for steady stability in domestic demand, the CBR said.

The CBR still plans to continue monitoring inflation risks, developments in the outside economic sphere and the effects of tightening money-credit terms for the Russian economy. The regulator said that, with this recent decision, it will focus on midterm inflation targets and estimates of economic growth, as well as inflation expectations.

The next meeting of the CBR's board will be held in the first ten days of October 2012 where they will review money-credit policy.

A refinancing rate of 8% has been in effect since December 26, 2011 when it was lowed from 8.25%. The last time the CBR raised the refinancing rate was on May 3, 2011, when it was boosted fro 8% to 8.25%.

Interest rates for CBR operations, in %: