Central Bank of Russia keeps key rate at 16% as expected

MOSCOW. April 26 (Interfax) - The Board of Directors of the Central Bank of Russia decided once again to maintain the key rate at 16% per annum at its meeting on Friday.

The decision is in line with analysts' expectations.

The Central Bank has maintained this rate for the third meeting in a row. The rate has remained at the same level since December 25 of last year, when it was raised 100 basis points from 15%.

The regulator said that current inflation pressure is weakening gradually, but remains high. "Due to continued increased domestic demand exceeding the possibilities for expanding supply, inflation will return to target somewhat slower than the Bank of Russia had predicted in February," the CBR press release following the meeting said.

The return of inflation to target and its further stabilization around 4% implies a longer period of maintaining tight monetary conditions in the economy than previously forecast.

The next meeting of the Central Bank Board of Directors on the key rate will be held on June 7.