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Russian Central Bank Keeps Interest Rates Unchanged

Russia's central bank on Monday maintained its key interest rates unchanged as expected and said that the decision was based on assessment of inflation risks and prospects for economic growth.

The Board of Directors at Bank Rossii left its refinancing rate unchanged at 8 percent. In December, the bank unexpectedly lowered the rate by a quarter point, which was the first reduction since 2010.

At today's meeting, the overnight deposit rate was retained at 4 percent and the repurchase rate was maintained at 5.25 percent.

Medium-term inflation risks have intensified due to uncertainty over the impact of the planned increase in regulated prices and tariffs in July, the central bank said in a statement

Inflation was unchanged at 3.7 percent in March, the weakest since the Soviet Union collapsed in 1991. The core inflation rate moderated to 5.5 percent. According to the central bank, this downward trend is expected to be short-lived.

Meanwhile, the macroeconomic indicators point to some improvement in economic conditions, it said.

Last week, Economic Development Minister Elvira Nabiullina said the Russian economy is likely to grow 3.4 percent in 2012, slower than the initially forecast 3.7 percent.

by RTTNews Staff Writer

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