RUSSIA’S central bank cut its key interest rate by 50 basis points to 11 percent Friday as expected, saying risks of the economy cooling now outweighed inflation risks.

    “The balance of risks shifts towards the considerable economic cooling despite a slight increase in inflation risks,” the bank said in a statement.

    The bank also said that an unexpectedly severe contraction in domestic demand in the first half of 2015 meant that it may revise down its output forecast. The bank had previously forecast a 3.2 percent GDP contraction in 2015.

    The 50 basis point cut means the central bank has now cut its one-week minimum auction repo rate by a cumulative 6 percentage points in 2015.

    Analysts had expected a cautious half-point cut rather than a bigger one because a recent slide in the ruble threatens to reignite inflation.

    The ruble, which had already been down over 1 percent before the central bank decision, fell further after the cut.

    The bank said consumer price inflation stood at 15.8 percent as of July 27, up from 15.3 percent in June, but it called the acceleration a temporary result of utility tariff increases.(SD-Agencies)