Russian Central Bank keeps key interest rate at 11 pct

The Russian Central Bank on Friday kept its key interest rate unchanged at 11 percent, citing high inflation risks amid low oil prices.

"Despite certain stabilization in financial and commodity markets as well as the current inflation slowdown, inflation risks remain high," the bank said in a statement.

"These factors stem from current developments in the oil market, the persistently high expectations about inflation and uncertainties surrounding budget configuration," according to the national banking regulator.

The key interest rate has remained unchanged at 11 percent since August 2015, after the Central Bank gradually lowered the rate from 17 percent, the highest level set in December 2014.

Russia's currency ruble on Friday maintained the appreciation trend amid the rise of international oil prices and the Russian Central Bank's announcement on the key interest rate.

As of 16:30 Moscow Time (1330 GMT), trading data of the Moscow Exchange showed the exchange rate of the ruble against the U.S. dollar down to 67.33 rubles and the exchange rate of the ruble against the euro to 75.98 rubles.

According to the Central Bank, the weakening of the ruble had resulted in Russian products gaining competitiveness, and helped economic growth in some industries including agriculture, food industry, chemicals and mining.

Elvira Nabiullina, the Central Bank Governor, said Friday at a press conference that the bank had revised its expectation of annual average oil prices in 2016 from 50 U.S. dollars per barrel to 30 dollars.

"The Bank of Russia has placed average price of oil at 30 dollars per barrel in 2016 and envisaged its gradual rise to 40 dollars per barrel in 2018 in the updated baseline scenario," Nabiullina said.

The Russian economy has plunged into a recession amid the drop of global oil prices and Western sanctions imposed over Moscow's alleged intervention in the Ukraine crisis. Endi