By Georgi Kantchev
Russia's central bank kept its key interest rate on hold at 4.25%, pausing a recent cutting cycle that saw rates fall to a record low as the coronavirus pandemic pushed the economy into a deep recession.
On Friday, the bank held its benchmark rate following a 0.25 percentage point cut in July to a post-Soviet low, as the ruble has recently fallen to multi-month lows against the dollar and inflation has strengthened.
The bank said in a statement that it would consider further cuts later at coming meetings.
The Russian economy has been pummeled hard by the virus. Russia recorded the fourth-highest number of Covid-19 infections in the world, with more than a million cases. Meanwhile, a tumble in oil prices earlier this year has hit industrial production and budget revenue, a third of which Russia derives from oil-and-gas sales.
The bank said Friday that the Russian economy has been slowly recovering from the twin shocks, but the upward path remains uneven.
"Recovery is the strongest in sectors focused on consumer demand," the bank said in a statement. "However, weak external demand remains a drag on economic activity. Once the first stage of economic recovery growth has petered out, the increase in economic activity will continue in a more gradual manner."
Write to Georgi Kantchev at georgi.kantchev@wsj.com
