The central bank of Russia remained on hold at its monetary policy meeting that concluded on Friday while promising to lower the cost of borrowing later this year.

The board of policymakers at the Bank of Russia held the key interest rate at 10.5 percent a month and a half after making its first rate cut in nearly a year. A few rate cuts seem to be lined up in the near future as inflation has slowed substantially to 7.2 percent as of late July from nearly 16 percent a year ago. Inflation is likely to be on track to reach 5 percent in May next year and hit the central bank’s target of 4 percent next year.

"The Bank of Russia will consider lowering the key rate further, taking into account inflationary risks and how the inflation slowdown matches forecasts," the central bank said in a statement.

The bank added positive annual GDP growth rate is forecasted for 2017, economic recovery trend prevails and positive quarterly GDP growth possible in the second half of 2017. According to the statement, the bank will absorb liquidity as it moves into surplus in banking.

Russia’s energy-reliant economy still remains stuck in a phase of recession due to a punishing economic crisis caused by the fall in oil prices and Western sanctions over Moscow's meddling in Ukraine. The ruble also remains volatile after a recent bounce back gave way to a fall as oil prices have slipped down.

Meanwhile, International experts remain more downcast on Russia's prospects as the International Monetary Fund anticipated that its GDP would shrink by 1.2 percent this year.