Russia's MTS blames Q3 profit drop on increased interest costs

Nov 19 (Reuters) - Russia's largest mobile operator MTS MTSS.MM on Tuesday blamed a sharp drop in third-quarter profit on increased interest expenses as interest rates that have climbed to 21% drive up borrowing costs for Russian companies.

Huge expenditure on Russia's military, rouble weakness, labour shortages and robust consumer demand have all contributed to stubbornly high inflation, which the Bank of Russia is trying to tackle with interest rates at their highest level in more than 20 years.

(Reporting by Gleb Stolyarov and Alexander Marrow; editing by Jason Neely)

((alexander.marrow@thomsonreuters.com;))