(Reuters) – Russia’s central banking sees potential for a reduction in interest rates as weekly inflation slows down, Deputy governor Alexei Zabotkin told Interfax on Thursday.

According to TASS, he stated that the company will release new economic projections in conjunction with the next rate-setting meeting scheduled for April 29.

In an emergency move, the bank increased its key rate by 20% to February. It then reduced it to 17% this week.

Russia may see an inflation rate of 17%-20% in the coming year. According to Alexei Kudrin who is the head and former finance minister, Russia’s economy could contract by over 10%.

The weekly inflation rate fell to 0.66 percent in the week following the crisis rate rise, capital control and other measures imposed by the central bank. Inflation has increased by an average 2 points since Moscow invaded Ukraine.

Zabotkin explained that while the rate of price growth remains significantly faster than the inflation target, it is slowly slowing down. “This allows us to slowly reduce the key interest rate.”

Interfax reported that 0.1% price growth per week equals central bank’s annual inflation target. He added that future rates will depend on the normalisation of financial stability risk factors.

From 9.15% in February to 16.69% in March, the annual rate of inflation increased to 16.69%. At present, the central bank anticipates that inflation will reach its target for 2024.

Moscow called it a “specially military operation”, and Russians took billions out of their accounts in the early days before the central banks introduced curbs.

Interfax quotes Ksenia Yudayeva as saying, “Nearly a year’s worth of cash was withdrawn from banks” in one day.

Zabotkin claims that liquidity has stabilized and that significant amounts of the cash withdrawn have been returned to their bank accounts.

After western sanctions frozen nearly half its $640 billion forex and gold reserves, the central bank was unable to support the ruble. Russia demanded that exporting companies sell at least 80% of its forex revenues on the international market. This is a policy it now intends to change.

When Yudayeva was asked if the central bank forecasted the freezing, which is a delicate issue that has put its leadership under fire, Yudayeva replied on Thursday, “Whatever happened was unprecedented… All told us such a probability was very low.”

President Vladimir Putin suggested that Elvira Nabiullina be her boss and the parliament will vote in favor of this proposal.