--The Bank of Russia left its key interest rate at 7.75% but warned of a potential cut this year amid a global slowdown

--The central bank expects weaker annual inflation than previously predicted, at 4.7%-5.2% from 5.0%-5.5%

--It could not yet say what impact a value-added tax hike in January would have on inflationary pressure

By Paul Hannon

The Bank of Russia said it may cut its key interest rate this year, becoming the latest central bank to change tack in the presence of slowing global economic growth and weaker inflation prospects.

Policy makers Friday left their key interest rate at 7.75%, but said they now expect consumer prices to rise less rapidly this year than they did previously.

"If the situation develops in line with the baseline forecast, the Bank of Russia admits the possibility of turning to cutting the key rate in 2019," they said in a statement.

Bank of Russia's head, Elvira Nabiullina, said following the rate decision that the bank had adjusted annual inflation expectations to 4.7%-5.2% from 5.0%-5.5% previously.

"Short-term inflationary risks have softened," she said. "Due to these tendencies, we expect to see inflation for 2019 on a lower level."

She also said that the peak of inflation this year will extend into March and April, but added that the speed at which prices were rising had slowed.

"There are grounds to assume that decisions taken last year to boost the key interest rate will likely be sufficient in order to guarantee the return of annual inflation to its target--close to 4%--in the first half of 2020," she said.

Ms. Nabiullina added that the central bank could not yet say what kind of influence a value-added tax hike in January would have on inflationary pressures.

The central bank last raised its key interest rate in December, when it warned further increases might be needed to keep price rises in check. Its change of heart since then follows similar reassessments by the U.S. Federal Reserve and the European Central Bank.

On Wednesday, the Federal Reserve left its key policy rate in a range between 2.25% and 2.5% and indicated that it is unlikely to raise rates this year. In late 2018, officials had signaled they expected between one and three increases this year.

Two weeks ago, the European Central Bank went further, saying it would launch new stimulus to support the eurozone economy via cheap loans for banks. It also said it expected to keep its key interest rate at minus 0.4% at least through 2019, a longer horizon than before.

Those shifts by the world's most powerful central banks have set off a domino effect, with policy makers in a number of developing countries now considering rate cuts, having pushed borrowing costs higher last year.

Central banks in a number of emerging markets countries followed the Fed in tightening their monetary policy last year, hoping to avoid an outflow of capital to the U.S. that would see their currencies weaken, and inflation accelerate as prices of imported goods rose.

"The revision of interest rates path by the US Fed and other central banks in advanced economies reduces the risks of persistent capital outflows from emerging markets," the Bank of Russia said.

Thomas Grove contributed to this article.

Write to Paul Hannon at paul.hannon@wsj.com.

(END) Dow Jones Newswires

March 22, 2019 09:53 ET (13:53 GMT)