Russia’s central bank on Friday cut its key interest rate, but warned inflation was still too high, amid growing concerns over an economic slowdown amid the Ukraine offensive.

Russia’s economy is rapidly cooling, prompting warnings it could be headed for recession or stagnation, following two years of robust growth as Moscow ramped up military spending to fund its campaign.

Announcing a cut in borrowing costs from 18 to 17 percent, the bank said the economy “continues to return to a balanced growth path,” alluding to the slowdown.

The bank had been expected to cut rates further, but BKS analyst Ilya Fedorov said a recent “weakening of the ruble” — at its lowest against the US dollar since April — forced it to hold back.

Russian government spending has jumped more than two-thirds since

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