The Russian central bank has left its key refinancing rate unchanged at 7.75 percent, but has raised deposit rates by 0.25 percentage points from December 27, the bank said on Friday following its board meeting.
"Given unchanged key macroeconomic trends and the current balance of external and internal inflationary risks, the Bank of Russia believes that it is possible to leave interest rates on refinancing operations unchanged to support economic growth recovery," the bank said in a statement.
Higher deposit rates contribute to a more flexible interest policy, the bank said, adding that under the bank's estimates, this measure would not lead to a considerable price increase on loans for end borrowers, making market interest rates less volatile in future.
The regulator cut its refinancing rate several times in 2010, slashing it to the record 7.75 percent from 13 percent at the beginning of 2010.
"Inflation amounted to 8.4% as of December 20 compared to 8.1% in November... Inflation is primarily boosted by higher food prices, supported by rising prices on the international commodities market," the bank said, adding that inflationary risks remained moderate.
