Russia's central bank announced on Friday that it kept the key rate steady at 7.50%, but warned that inflation risks are up.

"Current consumer prices are growing at a moderate rate, and consumer demand is subdued. Inflation expectations of households and businesses, essentially unchanged, remain elevated," the Bank of Russia said in a statement. "At the same time, pro-inflation risks are up and prevail over disinflationary risks."

The bank said inflation risks are the result of rising pressures from the labor market, worsening foreign trade conditions, and a softer fiscal stance.

Russia's annual consumer inflation came in at 12% in November, easing from a 12.6% year-on-year gain in October.

The central bank said it expects annual inflation to fall to the 5%-7% range next year and then further decline to 4% in 2024.

Bank of Russia Governor Elvira Nabiullina said in a statement that the trade restrictions on the country continue to create challenges for companies.

"The de-dollarisation of banks' balance sheets has continued in recent months. The structure of the demand for money is changing. Instead of foreign currency, the ruble is used increasingly more extensively to make payments, raise investment, and form savings," she added, AA reports.