MOSCOW (Reuters) – Russia’s central bank will consider a cutting interest rates next week, but it’s already used much of its room to ease policy and foresees limits to what it can do in the future, Deputy Governor Alexei Zabotkin told Reuters.

The central bank slashed its key rate by 100 basis points, the most in five years, to a record low of 4.5% at its last meeting. It was the third rate cut this year as it coped with a contracting economy and low inflation.

Although the bank sees a “significant risk” inflation will remain below its 4% target next year, Zabotkin said further policy easing is likely to be more gradual. The key rate was at 6.25% at the start of this year.

“Most likely the further pace of a cut will be more gradual given that the significant part of a room for easing was already used,” he said. The central bank’s board is due to meet on July 24 for its next key rate setting decision.

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