MOSCOW, April 29 (UPI) -- Citing the risk of crude oil prices moving lower and lingering inflationary pressures, the Russian Central Bank said Friday it was keeping its key rate steady.
The board of directors said in a rationale statement it was keeping its key rate at 11 percent even amid expectations of a slow recovery.
"Inflation fell perceptibly," the bank said. "However, the trend bears risks of instability."
An April report from the World Bank said the Russian economic recession is expected to eat away at progress meant to equalize the distribution of wealth in the country, with the poverty rate expected to increase nearly a full percentage point to 14.2 percent this year. If its forecast is accurate, the World Bank said that would erase nearly 10 years of progress.
The Central Bank in January said market conditions are likely to deteriorate further and possibly require it to tighten its monetary policies. Inflation at the time was expected to move from around 10 percent to 7 percent, but risks to the downward trajectory remain. Oil prices are recovering, though in early 2016 the bank's governors said there was a high degree of uncertainty surrounding the prospects for a market rebound.
"Due to the continued supply glut in the oil market, the risks of crude prices dropping and their negative pressure on exchange rate and inflation expectations remain high enough [to warrant the rate decision]," the bank said Friday.
The bank added, however, there were indications the Russian economy was growing more resistant to the fluctuations in crude oil prices.
Oil prices are about 20 percent lower than this time last year. Prices are up 32 percent for the month, however, to move within sight of $50 per barrel.
Russia's oil minister warned a price above $50 per barrel might skew markets heavily toward the supply side as energy investors look to capitalize on the forward momentum for crude oil.