(Bloomberg) -- Kazakhstan’s central bank unexpectedly hiked its key interest rate to help tame accelerating inflation that’s running at almost double the target.

The National Bank of Kazakhstan raised the benchmark to 16.5% on Friday. Seven out of eight economists surveyed by Bloomberg forecast no change from 15.25%, while one analyst expected a 50 basis point increase.

“Pressure on prices from the external sector has increased due to further acceleration of inflation in Russia,” the country’s second-largest trading partner, the central bank said in a statement.

The bank also increased its forecast for price growth in 2025 to 10%-12%, citing external factors, higher fuel prices and value-added tax rates. The previous outlook saw 6.5%-8.5% inflation this year.

Consumer-price growth quickened for a third month to reach 9.4% in February from a year earlier, far outstripping the central bank’s 5% target. The government highlighted a “negative” trend in inflation this week, forecasting that it would reach about 10% by the end of the year, according to the Kazinform news service.

The outlook for central Asia’s largest oil producer is clouded by plans to raise value-added tax next year, with ministers estimating a “short-term” addition to inflation of about 3 percentage points. Kazakhstan is also seeking to boost government spending, including 1 trillion tenge ($2 billion) on state sponsored lending to add at least 2 percentage points to economic growth this year.

The Kazakh central bank cut its forecast for economic growth in 2025 to 4.2%-5.2% from 4.5%-5.5%, citing a reduction in the government’s outlook for oil production.

A weakening tenge led to the first increase in the key rate since 2022 in November after the central bank spent $1 billion on interventions.

The central bank said in its statement that Friday’s decision to increase rates was taken with the aim of avoiding a larger, future increase.

The national currency fell to a record low in January, but has appreciated about 7% since the last rate decision on Jan. 17. It’s been helped by a government order for state-run companies to sell half of their foreign currency revenue and a central bank decision to sell dollars to mirror domestic purchases of gold.

The central bank, whose next policy meeting is scheduled for April 11, set its rates corridor — formed from the overnight deposit and lending rates — at plus-or-minus one percentage point around the benchmark.

(Updates with additional detail in the third and fourth paragraphs and GDP outlook in the sixth paragraph.)