(MENAFN- AFP) Inflation in Russia has hit a zenith of around 17 percent, the economy minister said Thursday, as the economic crisis roiling the country takes its toll.
"The peak in inflation has not passed but we have reached the highest point and will probably stay at this level for some time," minister Alexei Ulyukayev was reported as saying by Russian news agencies.
"I think that for quite a long time, a month and a half or two months it will be at around 17 percent," he said.
Inflation has shot up in Russia as the ruble national currency plummeted in value on the back of Western sanction over Moscow's role in the Ukraine crisis and falling international oil prices.
The steep rise in prices has slashed spending power of households across the nation and Russia is expected to plunge into recession this year.
Despite the surge in inflation, Russia's central bank cut interest rates this month for the second time since the start of the year as officials downplayed fears of further price hikes in a bid to breath life into the moribund economy.
"It's true the interest rate is still quite high," President Vladimir Putin said Thursday at a meeting with top business figures, adding that the conditions were not yet in place to lower it further.
Russia has not yet created "fundamental conditions that would allow us to feel confident, and targeted support is extremely important," he said, quoted by Russian news agencies.
With the ruble strengthening in recent weeks, Ulyukayev estimated that inflation would drop from its current high to less than 10 percent by the end of the year.
"From now until the end of 2015 or start of 2016 there is a strong probability that inflation will go back down to a level of less than 10 percent," he said.
That means that Moscow could further cut back on its interest rate -- currently at 14 percent -- after hiking it dramatically at the end of last year to stave off panic over the collapsing currency.
Finance Minister Anton Siluanov has meanwhile gave the slightly less rosy prediction that inflation would subside to between 11 and 12 percent.
Authorities in Moscow have scrambled frantically to plug the economic gaps, slashing budgets and channelling money towards faltering banks, but critics say the Kremlin does not have a clear plan to salvage the situation.
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