MOSCOW, Sept. 15 (Xinhua) -- The Russian central bank Friday lowered its key interest rate by 0.5 basis points to 8.5 percent on low inflation and continued economic growth, which is its fourth rate cut this year.
"Inflation is close to 4 percent while the economy keeps growing," the bank said in a statement, adding that August inflation in Russia decreased to 3.3 percent from a "short-lived" rise to 4.4 percent in June.
Fluctuations of food prices will remain the source of inflation volatility over the next six months, and short-term food market factors might trigger temporary deviations of inflation from the 4 percent, which will not persist, the bank said.
Russia's gross domestic product (GDP) rose 2.5 percent in the second quarter of this year, up from 0.5 percent in the first quarter, according to official statistics.
Economic growth was spurred by investment and consumer demand along with the recovery of production inventories with continued rise in manufacturing output, trade, mining and transport joined by construction, the central bank said.
It increased its forecast for the country's GDP growth from the previous 1.3-1.8 percent to 1.7-2.2 percent "in view of the positive trend set by the second quarter."
The Russian central bank cut its interest rate by half a percentage point to 10.5 percent in June 2016, the first reduction since August 2015. Then the bank cut it further to 10 percent in September 2016.
This year it cut the rate to 9.75 percent in March, to 9.25 percent in April and to 9 percent in June. During the next two quarters, the Russian central bank said it's possible it might cut the key rate further.
