AFP - Russia's central bank announced a half-percent cut in its main interest rates on Thursday, its third cut since the end of April to boost the crisis-hit economy as the ruble and inflation stabilise.
   
The bank's board of directors decided to cut the key refinancing rate, effective on Friday, to 11.5 percent from 12.0 percent, the central bank said in a statement published on its website.
   
The cut was the second in less than a month after the bank on May 14 cut the refinancing rate to 12 percent from 12.5 percent.
   
Russia at the end of April cut the refinancing rate to 12.5 percent from 13 percent in its first interest rate cut since 2007. In November, it hiked interest rates one percent to protect the ruble.
   
Earlier this year, the ruble came under sustained pressure on the markets, forcing the central bank to shell out tens of billions of dollars in foreign currency interventions to prop up the currency.
   
But the pressure has receded since the government implemented a controlled devaluation of the currency to help the economy cope with the global crisis.
   
Russian news agencies quoted the bank's deputy chairman Alexei Ulukayev as saying that further cuts were possible this year amid declining inflation -- a factor seen as a risk to a possible recovery.
   
"Inflation in May is two times lower than last year.... There are good chances it will show zero (month-on-month) or even negative figures," he said.
   
"Our expectations have been confirmed of a positive tendency in the Russian economy and the financial markets," he added.
   
Russian inflation was 0.7 percent in May from the month earlier, compared with 1.4 percent in May 2008, the statistics office said on Wednesday.
   
The Russian central bank is seeking to keep inflation under 13 percent this year after it hit 13.3 percent in 2008, its highest level since the figure of 15.1 percent in 2002.