RUSSIA’S central bank Friday opted to keep the main interest rate at 11 percent after lowering its rate five times this year, citing a serious deterioration in the economic situation.

    The bank said in a statement it made the widely expected decision “due to the higher inflation risks amid persistent risks of considerable economy cooling.”

    The bank also gave a gloomier growth forecast for this year, predicting a contraction of between 3.9 percent and 4.4 percent in 2015.

    It had previously predicted that GDP would contract by 3.2 percent. Its latest forecast is much more pessimistic than the government’s estimate of 3.3 percent contraction.

    The decision to keep the interest rate at the same level came after “August saw a serious deterioration in foreign economic conditions,” the central bank said.

    “Inflation and inflation expectations were showing a clear upward trend, impacted by the exchange rate dynamics.”

    The decision was expected by most economists since the central bank currently has little room for manoeuvre, wanting to lower the rate to help the economy recover but needing to protect the ruble.

    In December last year, the bank hiked interest rates to 17 percent in a bid to regain control as the Russian currency plunged due to falling oil prices and Western sanctions imposed over Russia’s actions in Ukraine.

    Russia has subsequently cut its interest rate five times since January, most recently to 11 percent July 31.(SD-Agencies)