MOSCOW: The Russian central bank expects its key interest rate to be in the range of 6.0-7.0% on average in 2022 before moving into the 5.0-6.0% range in 2023, the bank said on Thursday.

The central bank is expected to raise rates for a fifth time this year later in September to fight stubbornly high inflation amid a swift economic recovery after a 3% contraction in 2020, its sharpest slump in 11 years.

In 2021, the economy will expand by 4.0-4.5% before slowing to 2.0-3.0% per annum in 2022-2024, the central bank said in a report on its monetary policy outlook.

The central bank said annual inflation, its main area of responsibility, will slow to 4.0-4.5% in 2021 and to the 4% target in 2023 under its base scenario.

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As of late August, annual inflation in Russia hit a five-year high of 6.79%, hovering above the key rate which is now at 6.5%.

The Bank of Russia will hold its next board meeting on Sept. 10, where it is expected to raise the key rate again by at least 25 basis points, according to a consensus forecast of analysts polled by Reuters in late August.

The central bank also highlighted risks related to the COVID-19 pandemic, global inflation and increased state spending.