Russia's central bank on Friday cut its key interest rate from 11 to 10.5 percent, the first reduction in ten months after a recovery by the ruble on the back of oil price rises and a drop in inflation fears.

"The Bank of Russia Board of Directors decided to reduce the key rate from 11.00 to 10.50%," the bank said in a statement, noting the "positive trends of more stable inflation, decreased inflation expectations and inflation risks".