Russia's central bank has unexpectedly cut its main interest rate to 9.75 percent, from 10 percent, amid slowing inflation as the economy struggles to recover.
The March 24 decrease, Russia's first since September, may be followed by further reductions as inflation slows toward the end-year 4 percent target quicker than expected, the Bank of Russia said in a statement.
"The inflation slowdown is overshooting the forecast, inflation expectations continue to decline and economic activity is recovering," the statement said.
It says the bank sees "the possibility of cutting the key rate gradually in the coming second and third quarters."
Central bank chief Elvira Nabiullina told a briefing after the announcement that the bank board's decision was unanimous after several different rate options were considered.
Russia's economy continues to struggle as it emerges from a two-year recession sparked by a slump in energy prices and aggravated by sanctions imposed after its seizure of Ukraine's Crimean Peninsula in March 2014 and subsequent support for separatists in eastern Ukraine.