Mubasher: Russian central bank on Friday cut its benchmark interest rate on Friday for the first time as widely expected by market participants, in preparation for more monetary easing on the back of slowing economic activity, Reuters reported.

The central bank decided to lower its key policy rate to 7.50%, the level to which it was raised last December, down from 7.75%, citing an extended step-down in inflation and a slower-than-expected growth in the first half of this year.

“If the situation develops in line with the baseline forecast, the Bank of Russia admits the possibility of further key rate reduction at one of the upcoming Board of Directors' meetings and a transition to neutral monetary policy until mid-2020,” Central Bank of Russia (CBR) said in a statement.

The bank raised its interest rate twice last year in an attempt to curb a surging consumer price inflation.

Russia’s inflation was heading to slow down towards the 4% target more quickly than previously expected.

The rate cut came in line with a recommendation of the International Monetary Fund (IMF).

As of 10 June, the annual inflation clocked 5%, down from 5.1% last May, the CBR said.

Shortly ahead of the decision, the Russian rouble (RUB) stood against the US dollar at RUB 64.35.

By 12:19 pm GMT, the USD/RUB pair fell by 0.46% to RUB 64.26.