MOSCOW, May 19. /TASS/. The Bank of Russia sees potential for further key rate reduction to support the economy when the coronavirus pandemic-related restrictions are removed, the regulator’s Chief Elvira Nabiullina said at a meeting headed by President Vladimir Putin on Tuesday.

"Inflation has stabilized somewhere at the level of 3.1% per annum and, what is very important, inflation expectations are also starting to decline following a certain increase. All that enables us to pursue a mild policy. We have already reduced the key rate, and if the situation unfolds in accordance with our expectations, with our forecast, we have potential for further reduction of the interest rate for supporting demand in the economy, particularly, in the period when restrictive measures are gradually lifted," she explained.

Growth of prices for certain goods accelerated in March-April, after which prices started declining in early May, Nabiullina added.

Moreover, the financial market situation has stabilized in general, she noted. "As for the situation on the financial markets, generally it has remained stable. The ruble’s exchange rate volatility has declined, same as risk premiums on Russian financial assets," the regulator’s chief said.

Meanwhile, she mentioned that the yields of federal loan bonds (OFZ), which also influence the level of interest rates in the economy, have fallen.