Sanctions of the West against Russia will remain throughout the forecast period, according to Guidelines of Monetary Policy of the Bank of Russia for 2019-2021.

"The Bank of Russia considers that international sanctions introduced against Russia in 2014-2018 will continue to be in effect throughout the forecast period," the regulator said.

The Bank of Russia also revised upward its capital outflow forecast for 2018 from $55 bln to $66 bln. The regulator at the same time lowered the capital outflow forecast for 2019-2021 from $27 bln to $25 bln in 2019, from $18 bln to $15 bln in 2020, and from $18 bln to $14 bln in 2021.

Expected dynamics of inflation and inflation expectations will create conditions for relaxation of the monetary policy at the turn of 2019 - early 2020, the Bank of Russia added. "Consumer price growth rates will return to 4% in annual terms in the first half of 2020, as pro-inflation effects of VAT increase and exchange rate dynamics, which will impact inflation and inflation expectations in 2019, will completely exhaust. Expected dynamics of inflation and inflation expectations will create conditions for softening of the monetary policy at the turn of 2019 - early in 2020," the regulator said.

Inflation expectations of the population will remain sensitive to one-time events influencing inflation, the Central Bank said. "The Bank of Russia anticipates that inflation expectations will remain sensitive to one-time events affecting inflation over the forecast horizon. This largely pertains to expectations of the population," the Bank of Russia noted.