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(Bloomberg) -- The Bank of Russia held its key interest rate at a record-high 21%, surprising most analysts who’d expected policymakers to opt for another big hike to try to tame persistent inflation.

Six of 12 economists had predicted a two percentage-point increase, while two foresaw a hike to 24% and only two saw a hold. Price growth continues to run at more than twice the central bank’s 4% target.

The regulator decided to hold the rate because “monetary conditions tightened more significantly than envisaged” after October’s 200-basis point increase, the bank said Friday in a statement.

“The achieved tightness of monetary conditions creates the necessary prerequisites for resuming disinflation processes and returning inflation to the target, despite the elevated current price growth and high domestic demand,” it said.

Governor Elvira Nabiullina said the bank would weigh at its next meeting in February whether conditions justified another hold or required an additional rate increase.

“The task of monetary policy is not to reduce inflation at any cost,” she told a news conference in Moscow. “We cannot allow the economy to overheat further, we need to reduce overheating, and at the same time we need to avoid hypothermia.”

Russia’s annual inflation accelerated again in November to 8.9% from 8.5% in the previous month, even after the central bank increased the key rate in October. Inflation expectations, a closely watched metric for monetary policymakers, reached 13.9% in December, the highest level in a year.

The central bank began the year signaling it would consider monetary easing in the second half. Instead, it has sharply raised the benchmark from 16% since July as its bet on a slowdown in price growth failed to materialize. The central bank sees inflation returning to its target in 2026.

The decision to hold the key rate indicates the bank has shifted from an uncompromising fight against inflation to “a more balanced policy,” said Oleg Kuzmin, head of research at Renaissance Capital. “Now the main question is whether the Bank of Russia will start to reduce the rate quickly or keep it at 21%.”

Massive budget spending on the war in Ukraine and social programs have kept the economy overheated, while acute labor shortages have led to stiff competition for workers that’s driving up wages. Production hasn’t been able to expand quickly enough to keep pace with rapidly increasing demand.