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Russia’s central bank cut its key interest rate by 0.5 per cent to 9.25 per cent on Friday, citing the country’s continued emergence from a two-year recession.

The bank said inflation, currently at 4.3 per cent, remained on track to hit its longstanding target of 4 per cent by year’s end, allowing for further gradual cuts in rates over the course of the year. Industrial production and real income growth would allow consumer activity to grow without affecting inflation, the bank said.

Favorable economic conditions mean the bank expects gross domestic product to grow in the next three years even if oil prices, which strongly affect budget revenue and the value of the rouble, fall. The bank said it would retain its “moderately tight” monetary policy.

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