MOSCOW: Russia's Central Bank said that its key interest rate has been cut by 300 basis points to 14 percent.

"With pricing and financial stability risks no longer rising, conditions have allowed for the key rate drop," the bank said on Friday. It said recent statistics showed a decrease in price growth rates against the backdrop of the ruble's strengthening and soothing of consumer activity.

The efficacy of import substitution operations, as well as the scale and speed with which imports of completed goods, raw materials, and components recover, will define future inflation movements, according to the central bank.

The bank's monetary policy will ensure that inflation returns to goal in 2024, while also taking into account the need for a structural restructuring of the economy.

Russian inflation was 17.6 percent as of April 22, and the central bank said on Friday that it expected annual inflation to range between 18 percent and 23 percent this year, before dropping to between 5 percent and 7 percent in 2023 and reverting to its objective of 4 percent in 2024. In February, days after the invasion of Ukraine, the central bank raised the key rate from 9.5 percent to 20 percent in an emergency move to stabilise the plummeting ruble currency.

With the ruble now back to pre-war levels, officials are focusing on recalibrating the economy in order to absorb the impact of punitive sanctions imposed by international powers.

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