More cuts are expected by the Bank of Russia in 2022.
Russia's central bank cut its key interest rate on Friday, saying there was room for further reductions this year as the regulator tries to combat soaring inflation while supporting the country's shrinking economy.
The Central Bank of Russia reduced the key rate from 17% to 14% to mitigate the impact of international economic sanctions imposed on the country as a result of the military operation in Ukraine.
The ruble's recovery from sharp losses in the days following February 24 had slowed the subsequent rise in consumer prices, the regulator said in a statement announcing the cut.
The Bank of Russia stated that "the external environment for the Russian economy remains challenging and significantly constrains economic activity."
"With price and financial stability risks no longer on the rise," the regulator added, "conditions have allowed for the key rate reduction."
After reaching 23% in 2022, the central bank expects inflation to return to its 4% target in 2024. The key interest rate may be cut further this year, according to the report.
Earlier this month, the Central Bank reduced the interest rate to 17%. The cut came after an emergency hike to 20% in late February, four days after the military operation in Ukraine began. Before the start of the military operation, the key interest rate was 10%.