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UPDATE 1-Russia c.bank holds key rate, hints at cuts by year-end

(Adds c.bank quotes, detail)

MOSCOW, July 28 (Reuters) - The Russian central bank held its key rate unchanged at 9 percent on Friday, citing geopolitical risks and ongoing inflation concerns, but indicated there was room for lower rates by the end of the year.

After cutting rates three times this year, the central bank suspended its monetary easing cycle.

"Volatility in global commodity and financial markets, as well as exchange rate dynamics amid elevated geopolitical risks may have negative implications for exchange rate and inflation expectations," the central bank said in a statement.

It said inflation remained close to its 4 percent target and repeated wording it used after its previous board meeting in mid-June when describing the scope it saw for monetary easing.

"The Bank of Russia sees room for cutting the key rate in the second half of 2017. While making its decision hereinafter, the Bank of Russia will assess inflation risks, the inflation dynamics and economic developments against the forecast."

Analysts had been split between predicting either a rate cut or a hold decision, saying the bank would be cautious given the risk of new U.S. sanctions and a recent spike in food prices.

Twelve out of 21 economists expected the central bank to keep the key rate at 9 percent on Friday.

Analysts polled by Reuters in late June predicted the key rate would be lowered to 8.25 percent by the end of the year.

The central bank on Friday stuck to its 2017 GDP forecast for growth of 1.3-1.8 percent.

The rouble briefly firmed to 59.36 versus the dollar compared with a level of 59.44 seen shortly before the rate decision.

The central bank's next rate meeting is scheduled for Sept. 15. (Editing by Andrew Osborn)