By Maya Dyakina and Oksana Kobzeva
MOSCOW, Oct 9 (Reuters) - Russia's central bank is expected to keep its key interest rate on hold on Monday in a bid to bring inflation down.
Analysts expect the central bank to keep the one-week auction repo rate, presently 5.5 percent, on hold next Monday, as inflation remains above the bank's 5 to 6 percent target.
A Reuters poll at the end of last month showed forecasters unanimous in the view that there would be no rate change this month.
Inflation was 6.1 percent in September, still above the target range, with internal central bank research showing that the public still regards high inflation as the norm.
'The central bank is concerned about inflation expectations, currently at around 7 to 8 percent, according its data, which is significantly higher than their goals,' said Dmitry Polevoy, economist at ING bank.
The chronic inflationary psychology threatens to complicate the central bank's even more ambitious target of reducing inflation to 5 percent by the end of next year, staying its hand on rate cuts.
'We should hardly expect a lowering of interest rates next Monday,' said Alexander Morozov, Russian economist at HSBC.
'The triggers that could lead to (a rate cut) probably include a fall in inflation below the 6 percent threshold and core inflation also has to fall.'
Core inflation, which strips out volatile food and energy prices, was unchanged at 5.5 percent last month.
The central bank has introduced sweeping changes to its policy mechanisms since the last board of directors' meeting, from raising the 2014 inflation target to increasing the rouble's flexibility by cutting interventions.
The changes are aimed at establishing its inflation-fighting credibility under new central bank head Elvira Nabiullina and newly appointed first deputy Ksenia Yudayeva. The latter met analysts last week to discuss the operational changes.
Economists' expectations of an imminent rate cut have diminished over the last month following a range of central bank statements focused on strengthening the influence of its policy rates over market borrowing, as part of a long-term shift towards formal inflation targeting.
A new auction for three-month funds to be held on Oct. 14 should also reinforce this push.
The central bank has left its main lending rates unchanged for the past year, ignoring calls to cut them to boost the slowing economy.
Economic growth is expected to be less than 2 percent this year, well below initial forecasts, reflecting problems such as weak institutional development and over-reliance on natural resources. The central bank insists it cannot solve these problems through monetary policy.
(Reporting by Maya Dyakina and Oksana Kobzeva, editing by Jason Bush, Ron Askew) Keywords: RUSSIA CBANK RATES
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