A slowdown in Russia's consumer price inflation may provide scope for gradual reduction in the central bank's key interest rate, Central Bank of Russia Chairman Elvira Nabiullina said in an interview to the state-run Itar-Tass new agency.

A low inflation will create a favorable climate for investment, she said, adding that the main objective of the central bank will be keeping inflation contained.

Nabiullina said there are calls to ease monetary policy and pump more cheap money into the economy. Though this will ease the pain for a while, it may not help to boost growth in the long-term. Also, there will be risks of higher inflation and capital flight, she said.

The central bank aims to keep inflation at 4.5 percent in 2014 and at 4 percent in 2015-2016.

Russia needs low inflation, low budget deficit, low level of public debt, the policymaker said. "These are key indicators of macroeconomic stability, which create the conditions for economic growth."

In August, the central bank kept the key refinancing rate unchanged at 8.25 percent for a eleventh straight month. The bank had also noted that weak investment activity and a slow recovery in external demand were significant downside risks to growth.

RTTNews