Russia's Central Bank has today cut its key interest by one point to 11.5% as it tries to bolster an economy battered by Western sanctions and lower oil prices. 

The rate cut is the fourth this year after authorities hiked interest rates dramatically in December to 17% as the rouble nosedived. 

The Russian Central Bank cited the "persistent risks of considerable economy cooling" in a statement explaining the move, forecasting that GDP will fall by 3.2% in 2015. 

The authorities insist inflationary fears have subsided as they have chipped away at the interest rate over the past months in a bid to breathe life into the country's shrinking economy. 

Inflation in June dropped from a high in March to 15.6% and is expected to be reined in to below 7% by June 2016, the statement from the bank said.

In the short term, however, the bank warned it may have limited room for manoeuvre. 

"The Bank of Russia will be ready to continue cutting the key rate as consumer price growth declines further in compliance with the forecast, but the potential of monetary policy easing will be limited by inflation risks in the next few months," the statement said. 

Russia's economy has slipped into recession as the double whammy of Western sanctions over Moscow's meddling in Ukraine and low oil prices have taken their toll. 

The Russian rouble - which lost some 40% of its value against the dollar in 2014 - strengthened earlier this year before dipping again in recent weeks.