The Bank of Russia on Friday cut its key interest rate by 50 basis points to 5.5% and left the door open to further reductions at future monetary policy meetings.

The move comes as the spread of the coronavirus pandemic and a historic plunge in oil prices of late pose unprecedented threats to the Russian economy.

The central bank slashed its economic forecasts, projecting that Russian GDP (gross domestic product) will decline by between 4% and 6% in 2020, recovering to grow by between 2.8% and 4.8% in 2021 and 1.5% to 3.5% in 2022.

"The dynamics of economic recovery will largely depend on the scale and effectiveness of measures taken by the Government and the Bank of Russia to mitigate the consequences of the coronavirus pandemic," the bank said in a statement Friday.

As of Friday morning, Russia had confirmed more than 65,000 cases of the coronavirus, and Kremlin spokesman Dmitry Peskov told CNBC earlier this week that the country, and President Vladimir Putin, faces a "very problematic" situation.

The Bank of Russia also revised its inflation forecast, projecting between 3.8% and 4.8% for 2020 with a stabilization at its 4% target in the future. In its press release Friday, the Bank of Russia said disinflationary pressure from shutdowns compensated for inflationary factors such as the fall in oil prices.

This marks Russia's seventh rate cut in the past year. Prior to holding the rate steady at 6% in March, the central bank had issued six consecutive cuts.

The dollar rose by around 0.8% against the Russian ruble following the announcement.