(MENAFN- AFP) Russia's Central Bank signalled on Friday it could tighten policies in response to a plunge of the ruble outpacing other emerging currencies.The Central Bank met market expectation by leaving its key interest rate unchanged at 5.50 percent on Friday, based on moderating rates of inflation and persistently disappointing growth.But the bank went out of its way to caution that inflation remained a risk owing to a drop of the ruble against the dollar exceeding seven percent since the start of the year."The main source of uncertainty for this forecast is the risk of inflation linked to the accelerated pace of price rises at the end of 2013 and the ongoing weakening of the national currency," the bank said in a statement."If the negative effects of these factors spread on the price of a wide range of goods and services and on people's expectations, the likelihood rises of inflation deviating from its medium-term targets," it added."In this case, the Central Bank will be ready to tighten its monetary policy."The Central Bank's statement was issued moments after the ruble established a historic low against the euro in early morning trading on the Moscow Exchange.The Russian currency made a slight recovery after the statement was issued and stood at 48.03 against the euro at 1230 GMT -- stronger that the 48.39 inter-day low it hit on January 30.The dollar was worth 35.03 rubles and also within striking distance of its historic high.Analysts at VTB Capital estimate that emerging market currencies have lost 1.5 percent of their value against the dollar since the start of they year.This makes the ruble the emerging world's worst performer. The South African rand is second-from-bottom on the list with losses of 4.5 percent.Economists have concluded that the Central Bank purchased more than $8 billion of dollars (5.8 billion euros), and euros, on the Moscow market in January in an effort to stop the ruble from falling further.The volume was the largest since the closing months of Russia's 2008-2009 economic collapse.Emerging markets have suffered from the Federal Reserve's launch of monetary tightening measures that have seen investors flee riskier assets in anticipation of higher rates of return on US bonds.
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