MOSCOW: Russia's central bank kept its main interest rate unchanged at 8.25 percent for the ninth month running on Monday in the face of inflation which has accelerated to the fastest rate for 21 months.
The expected decision came amid analyst forecasts of a rate cut in the second half of the year when inflation is expected to slow and the bank will have to stimulate growth that has dropped to nearly half of initial expectations.
The central bank also left the discount rate at which it repurchases government securities from the commercial institution steady at 5.5 percent while lowering some medium- and long-term borrowing rates.
"At July's meeting we expect policy makers will have no choice but to cut short-term (discount) rates, as June will bring sharp headline disinflation and also given the large negative surprise from May's economic report," VTB Capital said in a research note.
The annualised inflation rate hit 7.4 percent in May -- well ahead of the government's target of 5.0 to 6.0 percent.
The economic ministry meanwhile has cut Russia's revised growth forecast to 2.4 from 3.6 percent for the year.
The government had initially pencilled in 2013 growth of 5.0 percent.
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