UPDATE 3: Russian central bank keeps key rate at 11%

(Adds comments in seventh paragraph)

MOSCOW, Dec 11 (PRIME) -- The Russian central bank has kept its key rate unchanged at 11%, the regulator said in a press release Friday.

The central bank made the decision “taking into account higher inflationary risks and risks of economic slowdown,” the regulator said.

The regulator has also decided to equal its refinancing rate with the key rate starting from January 1, 2016. “In the future, the refinancing rate will be changed simultaneously with the key rate and by the same degree,” the bank said.

The central bank expects that Russia’s annual inflation will amount to around 6% in 2016 and reach the targeted level of 4% in 2017.

Inflation has been slowing in November and December, the regulator said. As of Monday, annual inflation fell to 14.8% from 15.6% in October. Seasonally adjusted monthly inflation slowed to 0.7% in November from 0.9% in August–October.

Annual inflation will slow significantly at the beginning of 2016, the bank said.

The central bank will resume cutting its key rate once inflation slows and inflationary risks weaken, it said. The regulator will hold the next meeting to consider the key rate on January 29, 2016. It may reduce the rate at one of the next three meetings, Chairwoman Elvira Nabiullina said.

The gross domestic product (GDP) contraction will slow to 0.5–1.0% in 2016, while economic growth of 0.0–1.0% is expected in 2017, the regulator said.

End