Ukraine's annual inflation rate spiked to 28.5 percent in January, official data showed Friday, highlighting the impact of the conflict in eastern regions on the weakening economy.

In January, food prices, utility costs and transport prices were up 30.1 percent, 34.6 percent and 42.7 percent year on year, respectively, the State Statistics Service said in a report.

Analysts expected further increases in the inflation rate in the coming months, as political and economical instability continued to put pressure on the local currency, the hryvnia, feeding panic across the market.

The National Bank of Ukraine earlier took moves to devalue the local currency to an all-time low against the U.S. dollar, with hryvnia, the currency of Ukraine, weakening to about 23.13 per dollar. Before the start of the crisis in Ukraine in February 2014, the exchange rate was around 7.99 hryvnia to the dollar. Endite

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