Russia's central bank left its key interest rate unchanged for a second month, as the economic recovery gained momentum and inflation slowed.

The Bank Rossii kept its refinancing rate at a record low of 7.75% on Friday. The central bank had lowered the key rate fourteen times since April 2009.

The bank said in a statement that macroeconomic indicators have showed positive signs. Moreover, inflation continued to ease. Consumer prices rose 5.8% year-on-year in June compared with the 6% increase in May. By July 26, Russia's inflation was 5.7%. The bank said the current inflation level does not warrant a monetary policy revision.

Given that the unemployment rate has already reached pre-crisis level, its further reduction may be a sign that the economy is returning to a sustainable growth period. The central bank also cited an increase in fixed investment, retail trade and bank lending.

However, the volume of consumer lending remained below pre-crisis level, whereas households' deposits volume continued to grow. The central bank said this trend indicates that there is potential for a growth in domestic demand.

Copyright(c) 2010 News.com, Inc. All Rights Reserved