Russia's central bank on Friday decided to retain the benchmark refinancing rate unchanged after a surprise hike in September, as it noted that there is no demand-side pressures to inflation at the moment.

Bank Rossii retained the key refinancing rate unchanged at 8.25 percent after a quarter-point hike in September. The central bank said that the decision was supported by the assessment of inflation risks and economic growth prospects.

According to the Bank of Russia estimates, significant demand-pull price pressures are absent though there are signs that inflation is spreading to other consumer market segments apart from food and regulated prices and tariffs. In September, the pace of inflation continued to rise and reached 6.6 percent over a year ago, exceeding the 6.3 percent target.

The central bank said that August's macroeconomic indicators pointed to a certain slowdown in economic activity, as reflected in slower industrial production growth as well as lower growth rates of investment and consumer demand.

However, according to the Bank of Russia estimates, gross output remains close to its potential level.

There are certain signs of stabilization of the banking credit growth. Nonetheless, the Bank of Russia judged that currently the risks of a significant economic slowdown stemming from somewhat tighter monetary conditions are minor.

RTTNews