Russia's central bank kept its key interest rate at 20% on Friday following an emergency rate hike in late February designed to support financial stability and warned of higher inflation and an economic contraction.

The central bank met on rates after raising the key rate from 9.5% on Feb. 28 to 20% when the rouble crashed to record lows after the West imposed sanctions against Russia after it sent tens of thousands of troops into Ukraine.

On Friday, the central bank said inflation, its main area of responsibility, would return to its 4% target in 2024, but did not give inflation forecasts for this year.

"The Russian economy is entering the phase of a large-scale structural transformation, which will be accompanied by a temporary but inevitable period of increased inflation," the central bank said in a statement.

Russia's economy will contract in the coming quarters, the bank said.

The rate decision was in line with a consensus forecast of analysts polled by Reuters. High inflation dents living standards and has been one of the key concerns among households for years. Higher rates help tame inflation by pushing up lending costs and increasing the appeal of bank deposits.

Elvira Nabiullina, governor of the central bank, will shed more light on the central bank's forecasts and monetary policy plans at an online briefing at 1400 GMT.

The next rate-setting meeting is scheduled for April 29.