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The Bank of Russia has decided to cut the key rate by 300 basis points to 17 per cent per annum from April 11.

"External conditions for the Russian economy are still challenging, considerably constraining economic activity. Financial stability risks are still present, but have ceased to increase for the time being, including owing to the adopted capital control measures," Xinhua news agency quoted the central bank as saying in a statement.

According to the statement, the bank holds open the prospect of further key rate reduction at its upcoming meetings, and the next rate review meeting will be held on April 29.

Russia drastically raised the key rate from 9.5 per cent to 20 per cent on February 28 to support financial and price stability and protect the savings of citizens from depreciation, just four days after it launched its war in Ukraine.

The central bank decided to keep the key rate at 20 per cent at the rate review meeting on March 18.