Russia’s central bank cut its key interest rate to the pre-crisis level of 9.5% on Friday and said it would continue to explore the scope for more cuts as inflation slows from near 20-year highs and economic contraction looms.

The bank had hiked its rate from 9.5% to 20% in the immediate aftermath of Moscow’s despatch of armed forces into Ukraine on Feb. 24, but had since cut rates three times in steps of 300 basis points - the last of them two weeks ago.

Friday’s rate cut exceeded average expectations of a 100-basis-point move in a Reuters poll from earlier this week.

“The Bank of Russia will consider the necessity of a key rate reduction at its upcoming meetings,” the bank said in a statement.

The latest cut brought the key rate far below annual inflation, which stood at 17.0% as of June 3, according to the central bank.

It has said it hopes inflation will fall to its 4% target in 2024.

It revised its inflation forecasts and now expects consumer prices to increase by 14-17% in 2022 compared with its previous forecast of an 18-23% rise.

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“Current inflation is appreciably below the Bank of Russia’s April forecast,” it said.

High inflation dents living standards and has been one of the key concerns among Russians for years, but Russia needs cheaper lending to help the economy overcome sweeping Western sanctions.

The central bank said a decline in economic activity in the second quarter was less pronounced than expected, and that the full-year contraction could also be lower than it forecast in April.

The economy grew by 4.7% in 2021. Central Bank Governor Elvira Nabiullina will shed more light on the bank’s forecasts and policy plans in a media briefing at 1200 GMT.

The next rate-setting meeting is scheduled for July 22.