(Reuters). Russia’s central banks cut their key interest rates to 9.5%, the level they had before the crisis. They also said that more cuts would be possible as inflation drops from its near-20-year peak and the threat of economic contraction.

In the immediate aftermath, the bank raised its rates from 9.5% to 20 percent on February 24, when Moscow sent armed forces into Ukraine. However, the bank has since reduced rates by three times. The last time was two weeks ago.

The rate reduction Friday was more than the average expectation of a move of 100 basis points in a Reuters poll earlier this week.

The Bank of Russia stated in a statement that it will examine the need for a reduction of the key rate at its forthcoming meetings.

According to the central banks, the most recent cut brought down the key rate below the annual inflation rate which was 17.0% at June 3.

The government has stated that it expects inflation to fall below its target of 4% by 2024.

The company revised its inflation projections, and expects that consumer prices will rise by between 14-17 percent in 2022, compared to its earlier forecast of an increase of 18-23%.

According to it, “Current Inflation is significantly below the Bank of Russia’s April Forecast.”

Inflation is a major concern for Russians. However, Russia requires cheaper loans to overcome the sweeping Western sanctions.

According to the central bank, the decline in economic activity was not as severe in the second quarter than anticipated. The full year contraction may also be less than what it had forecasted in April. The economy expanded by 4.7% in 2021.

Elvira Nabiullina (Central Bank Governor) will give more details about the bank’s policy and forecasts in a press briefing at 1200 GMT.    Next rate-setting meetings are scheduled for July 22.