MOSCOW, Oct 2 (Reuters) - Russian Central Bank Governor Elvira Nabiullina said on Sunday that a possible sharp deterioration of China's economy might lead to interest rates going up again in Russia, TASS news agency reported on Sunday.
The central bank cut its key rate by 50 basis points to 10 percent last month in only the second reduction this year as inflation slowed to 6.6 percent in mid-September from 9.8 percent in January.
The bank has said it plans to leave the rates on hold for the rest of the year and will maintain a moderately tight monetary policy in the mid-term with a positive level of real rates.
But Nabiullina said that a possible hard landing of the Chinese economy, the world's largest energy consumer, might result in an increase in Russian rates.
"If there is a downturn in the Chinese economy it may have an impact on the exports of Russian companies. If these risks materialised, we would have to raise rate," TASS quoted her as saying.
China's economy grew 6.9 percent in 2015, the slowest pace in a quarter of a century, but is still comfortably the fastest growing among major economies.
China's economic fundamentals are sound and it remains a contributor to global growth, the country's Commerce Ministry said on Saturday, after the World Trade Organization cut its forecast for global trade growth this year by more than a third.
Nabiullina also said that she was confident about Russia reaching an inflation target of 4 percent in 2017 (Reporting by Vladimir Soldatkin. Editing by Jane Merriman)