The Central Bank of Russia is cutting the key interest rate by 1 percent, Russian Finance Minister Anton Siluanov announced on Thursday.

Siluanov said that the central bank was able to cut the rate down because of  salary growth freezes and the non-increase of budget spending.

"The Bank of Russia made a decision to cut key interest rate, partly thanks to the fact that we froze the growth rates of salaries and did not increase budget expenditures," Siluanov said. "When the issue was discussed at the board meeting [of the Bank of Russia] it is this position that was one of the key for the Central Bank to make this decision [to cut key interest rate]."

The Wall Street Journal reported that future cuts to the interest rate are possible. According to the report, the bank expects further contraction of the economy into early 2016, but they expect it to rebound.