The Board of the Central Bank decided to keep the interest rate at 16% per annum, the bank said today in a statement.
“This decision is reportedly due to the upcoming deregulation of prices and increased economic uncertainties in the world due to the outbreak of the coronavirus.
The Central Bank admitted that the inflation will peak in Q2. Moreover, in the second year-half, the effect of tariff growth will gradually decrease and the annual inflation rate will approach the upper boundary of the forecast corridor.
The Bank noted that in case of delay in price deregulation, further annual price adjustments would be required, which could exert additional inflationary pressure, making it difficult to achieve the inflation target by 2023.
“A one-time transition to market pricing may have a certain short-term effect on inflation, but this will help to adress problems on the way of developing production processes, increasing the availability of energy resources in the regions of the republic and increasing supply volumes - production of goods and services,” the statement said.