* Russian c.bank cuts rate by 25 bps to 9.75 pct
* Rapid disinflation allows first rate cut since Sept
* Gradual cuts in pipeline, monetary policy to stay tight
* Key rate now at level last seen in 2014
* Graph: Russia's rates bit.ly/2neVbUX
(Writes through after Nabiullina news conference)
By Andrey Ostroukh and Alexander Winning
MOSCOW, March 24 Russia's central bank trimmed
its main lending rate on Friday and said there could now be
gradual easing as inflation eases down to new post-Soviet lows.
After holding the key rate at 10 percent since
September, the central bank cut it to 9.75 percent, saying
inflation was slowing down quicker than forecast.
It signalled small cuts could follow in the second and third
quarters of the year.
"We could have pauses, though we really see a trend towards
easing, towards lowering the rate in the medium term," Central
Bank Governor Elvira Nabiullina said.
"But we will do that very carefully and smoothly."
The bank is focused on bringing inflation to 4 percent by
the end of the year and has kept policy tight since 2014 despite
a deep economic slump brought on by the collapse in global oil
prices and Western sanctions over the Ukraine crisis.
The decision to ease policy on Friday came despite the
majority of analysts predicting in a Reuters poll the extremely
cautious bank would hold rates.
Nabiullina said at a news conference that further rate cuts
could come at any board meeting.
While the central bank pointed to a slowdown in inflation
from 5 percent in January to 4.3 percent in March, it expressed
concerns about the inertia of inflation expectations and
volatility on global markets.
"To keep inflation close to the target level there could be
a need to retain moderately tight monetary policy on the horizon
of two to three years," Nabiullina said.
Capital Economics said in a research note it took
Nabiullina's rhetoric to mean the central bank was not yet on
the brink of lowering interest rates dramatically.
Previously, Nabiullina has said the key rate should exceed
inflation by 2.5-3 percentage points. Given her bank's 4 percent
inflation target, this suggests the key rate could be held above
6.5-7 percent over the next few years.
Citi economists said they thought the key rate would fall to
8.5 percent by the end of the year.
The central bank also said on Friday it was more optimistic
on the prospects for economic recovery, now seeing gross
domestic product growing by 1-1.5 percent in 2017 compared with
a previous forecast for GDP growth of less than 1 percent.
It expects oil prices to average $50 per barrel this year.
The central bank is set to hold its next rate-setting
meeting on April 28.
(Reporting by Andrey Ostroukh and Alexander Winning; Editing by
Christian Lowe/Jeremy Gaunt)