Russia's ruble banknotes are seen in the file photo taken on April 28, 2017. (Xinhua/Shi Hao)
MOSCOW, Nov. 16 (Xinhua) -- The Central Bank of Russia will cut the key interest rate step by step to 6 to 7 percent over the next one or two years, the bank's governor Elvira Nabiullina said Thursday.
"We will lower the key rate gradually because there are pro-inflation factors and there is a factor of high inflation expectations. We expect to reach the equilibrium level of the key rate at 6-7 percent per annum within one or two years," Nabiullina was cited by Sputnik news agency as saying at the Russian lower house.
Last month, the central bank lowered its key interest rate for the fifth time this year by 25 basis points to 8.25 percent, with inflation and economic growth levels close to the target.
Russia's annual inflation currently stands at 2.6 percent and is likely to stay at 2.5-2.7 percent at the end of this year, Nabiullina said.
It is expected to gradually return to the target level of 4 percent next year, she added.
The governor said the central bank will also consider resuming the purchase of foreign currency when inflation stabilizes, noting that the amount of reserves is targeted to reach 500 billion U.S. dollars from around 425 billion dollars at present.
According to the central bank, Russia's economic growth rate is "close to potential" and is expected to reach 1.8 percent in 2017.
On Monday, Russia's official statistic service Rosstat said the country's gross domestic product (GDP) grew 1.8 percent in the third quarter of this year.