MOSCOW, June 16 (Xinhua) -- The Russian central bank lowered its key interest rate by 0.25 percentage points to 9 percent on Friday, its third rate cut this year, citing curbed inflation and economic recovery.
"Annual inflation stood at 4.1 percent in May keeping close to the target," the bank said in a statement.
The bank said low inflation was gradually gaining sustainability and price growth for major groups of goods and services was becoming more homogeneous in the regions, while growth in prices for non-food goods and services continued to decline.
Short-term inflation risks connected with oil price dynamics have declined following the extension of the agreement to reduce oil output by oil-exporting countries, it added.
However, annual growth in prices for fruit and vegetables was rising due to the exhaustion of the supply of last year's harvest, which has led to a short-term inflation increase to 4.2 percent as of June 13, according to the statement.
"The Bank of Russia will continue to conduct moderately tight monetary policy to maintain inflation close to the 4 percent target," it said.
According to the document, the central bank had raised its gross domestic product (GDP) growth rate forecast to 1.3-1.8 percent this year from the 1.0-1.5 percent predicted earlier, adding that a GDP annual growth rate higher than 1.5-2.0 percent was possible if structural reforms took place in the country.
The bank sees room for cutting its key rate further in the second half of 2017, the statement said, on the basis of the assessment of inflation risks, inflation dynamics and economic developments.
The Russian central bank cut its interest rate by half a percentage point to 10.5 percent in June 2016, which was a first reduction since August 2015, and further cut the rate to 10 percent in September 2016, to 9.75 percent in March and to 9.25 percent in April.
