MOSCOW, January 30. /TASS/. The Russian currency came under strong pressure in Moscow trade on Friday, falling past the psychologically important level of 70 rubles to the dollar after the regulator unexpectedly took a decision to cut the key rate to 15%

The ruble opened moderately lower on the Moscow Exchange on Friday, falling by 31 kopecks against the dollar to 69.04 and 53 kopeks against the euro to 78.2 but extended further losses in afternoon trade after the Central Bank of Russia announced its decision to cut the key one-week repo rate to 15% from 17%

By 2:08 p.m. Moscow time (11:08 GMT), the Russian currency had lost 2.59 rubles against the dollar to 71.32 and shed 3.3 rubles versus the euro to 80.99. The ruble eventually pared some losses, trading at 70.4880 to the dollar and 80.0395 against the euro by 2:53 p.m. Moscow time.

The regulator’s decision did not coincide with a consensus forecast of analysts and bankers who expected the key rate to stay unchanged amid persistently high inflationary and devaluation expectations.

The regulator said, however, its decision could be explained by "a shift in the balance of risks of accelerated consumer price growth and the economy’s cooling."

The Central Bank hiked the main lending rate to 17% from 10.5% on December 15 in a bid to stem the ruble’s slump amid falling world oil prices, western sanctions, a faltering economy and large capital flight.

Central Bank Governor Elvira Nabiullina earlier said the regulator would be ready to lower the key rate if a steady trend emerged for lower inflationary and devaluation expectations.

Russia’s Central Bank said in a comment on Friday that the decision to dramatically raise the key rate on December 15 "helped stabilize inflation and devaluation expectations to the extent expected by the regulator."

"The current upsurge in inflation is driven by the accelerated price adjustment to the weakened ruble and has a limited time effect. Inflationary pressure will be subsequently restrained by lower economic activity," the regulator said in a statement.

Russia’s annual consumer price growth reached 13.1% as of January 26 but "the current monetary conditions are creating pre-requisites for the inflation decrease in the medium term," the regulator said.

Economists and bank analysts polled by TASS news agency on Thursday said the Bank of Russia would keep the key rate at 17% This opinion was shared by Credit Suisse, HSBC, Gazprombank, UniCredit Bank, Alfa-Bank, Metalloinvestbank, Uralsib Bank, B&N Bank, Otkritie Capital and Renaissance Capital.

"We doubt that the Central Bank can afford to start monetary easing policy now that inflationary expectations are on the rise and there are still fresh memories about the ruble’s recent devaluation," Economist Alexei Pogorelov at Credit Suisse’s Russia office said.

Meanwhile, Uralsib Capital Analyst Irina Lebedeva said Russia’s inflation would test new levels in the next few weeks and come close to 17%, the level of the regulator’s key rate as of January 29.

"I don’t see any signal for a rate cut now," she said. The risks of further inflation growth and the ruble’s devaluation still persist and, therefore, "there is no sense in cutting the rate now just to raise it again on March 13 [the date of the regulator’s next interest rate policy meeting]," she added.