Data released by the Russian State Statistics Service on Tuesday showed that Russia's monthly inflation was 0.4 percent in May, and the year-on-year rate for the last 12 months reached 7.3 percent.

The decline follows double digit annual inflation rate throughout 2015 due to crumbling oil prices, coupled with the weight of Western sanctions and price hikes only abated in recent months. The data shows that Russian inflation continues to stabilize and therefore give the Central Bank more scope to engage in a rate cutting cycle.

"We expect a 50bp cut at this week’s meeting. Although CBR could theoretically do more given the scale of real rates in Russia, we think CBR will be unlikely to do so. The credibility which CBR gained was hard won and given a still uncertain external environment we think that muted cuts this week are prudent." said Commerzbank in a report.

The statistics service predicted that the country's inflation rate will remain at 0.4 percent m/m in June, as consumer prices continue to stabilize. The annual rate will be probably decreased to 6.3-6.5 percent by the end of 2016, said Alexey Vedev, deputy minister for economic development. End-2019 annual inflation rate was decreased further to 4 percent by the ministry.