The Russian central bank has cut its interest rates in March for the 12 th time since April 2010, lowering it from 8.5% to a record low of 8.25%. It had previously been 13% in March 2009 and has seen falls every month since then.

It has also reduced its repurchase rate charged on one and seven day central bank loans to 7.25% from 7.5%. It last cut its rates in February by a quarter-point. The bank has also reintroduced overnight deposit operations at the rate of 2.75%.

The bank is lowering borrowing costs as signs appear that a recovery has lost momentum following a record contraction in 2009. Industrial production expanded at a slower pace in February 2010 and bank loans continued to shrink even as lending conditions eased last quarter. Unemployment and slack demand for credit are holding back a rebound, according to Andrei Kostin, head of VTB Group, Russia’s second-largest bank.

The economy expanded by an annual +3.9% in February 2010 but shrank a seasonally adjusted -0.9% on a monthly basis according to deputy economy minister, Andrei Klepach, growth is set to pick up in April however.