Russia interest rate cut
A board showing currency exchange rates is seen in central Moscow February 2, 2015.REUTERS/Maxim Zmeyev

Russia has cut its key interest rate for the second time in two months, by one percentage-point to 14%, and said more rate cuts are in the pipeline.

The Bank of Russia's move is in line with most economist forecasts, as stabilising inflation is propping the Russian economy that has been buckling under low oil prices and sanctions over Ukraine.

Friday's move is another sign of confidence from the authorities who seem to believe the worst of the economic turmoil brought by Western sanctions over its involvement in Ukraine and the tumbling oil price could soon be over.

The cut also translates a slower pace of decreases after central bank Governor Elvira Nabiullina's surprise 2 percentage-point cut at its previous meeting in January, as oil prices dropped and inflation in February soared to the fastest since 2002.

The watchdog is bowing to calls from business leaders to unwind December's emergency increase to 17% to try to stem a collapse in the ruble, and boost an economy entering its first recession in six years.

"The current monetary policy and low economic activity will be conducive to the slowing of annual consumer price growth," the central bank said in the statement.

"As inflation risks abate, the Bank of Russia will be ready to continue cutting the key rate."

But economists said the move represents a risky bet that Russia's fragile financial system could soon be buoying.