(Reuters) – The Russian central bank will consider cutting the key interest rate from 17% at upcoming board meetings, Governor Elvira Nabiullina said on Thursday, flagging economic challenges that Russia will face as it tries to blunt western sanctions over Ukraine.

Nabiullina also said Russia is looking at adjustments to its forex controls to avoid situations where the rouble exchange deviates on a shadow market from official levels.

She said the central bank’s emergency rate hike to 20% in late February helped stabilise the rouble and overcome a spike in inflation. Now, having cut the rate to 17% in April, the bank is ready for more monetary easing, Nabiullina said ahead of the April 29 board meeting.

“We will consider the possibility of its further reduction at upcoming meetings,” Nabiullina said, speaking at the lower house of parliament, the Duma.

She warned that Russia, which saw its strongest economic growth in 13 years in 2021, will now go through structural changes, as its access to the global financial system and trade is limited by tough western sanctions.

“Problems may arise even when there is a production with a high degree of localisation, when there has already been a fairly high import substitution,” Nabiullina said.

For example, she said, Russia produces its own paper but uses foreign bleaching agents, or urgently needs foreign-made packing materials for food stuff produced in Russia.

“It all takes time,” she said.

Russia is facing soaring inflation and capital flight while grappling with a possible debt default after the West imposed sanctions on banks, businesses and individuals.

Nabiullina also said Russia aims to extend the number of countries that accept Russia’s MIR banking cards, an alternative to VISA and MasterCard which have joined other Western firms and suspended their operations in Russia.

Mir and China’s UnionPay are among the few options left for Russians to make payments abroad since Russian banks were isolated from the global financial system in response to what Moscow calls its “special military operation” in Ukraine.

(Reporting by Reuters)