⁍ * Bank of Russia keeps key rate at 4.25%.

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⁍ Decision in line with expectations.

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⁍ Central bank says will study need for lower rates.

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⁍ Analysts expect bank to cut rates further.

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– Russia’s central bank kept its key interest rate unchanged at a record low of 4.25% on Friday, as expected, but said a rate cut is still possible later this year, Reuters reports. “Firstly, in recent months inflation has been slightly higher than expected,” said Elvira Nabiullina, governor of the Bank of Russia. ” Secondly, the external environment has become more volatile. Geopolitical risks have intensified.” The central bank said it would consider cutting rates further if the situation develops “in line with the baseline forecast.” Lower rates can help the economy through cheaper lending, but can also increase inflation, and make the rouble more vulnerable to external shocks. The central bank’s comment that disinflationary risks prevail opens the door for a rate cut to 4% at meetings in October or December, said Dmitry Polevoy, head of investment at Locko Invest. Analysts at Capital Economics, who had expected the central bank to cut the rate in September, now expect it to finish this year unchanged at 4.25% before falling to 3.50% by the end of next year.