The Central Bank's BOD today decided to keep the interest rate at 14% per annum, the regulator's press service said. The Central Bank pointed out that the economy was growing steadily in Q3. The slowdown in annual inflation was facilitated by relatively tight monetary conditions, the exhaustion of the influence of last year's factors, and stronger soum have contributed to stabile prices for goods.

According to the regulator, annual inflation in September dropped to 8%, which is by 0.8 percentage points lower than a month earlier. Inflation of food and non-food items slowed to 6.1%, while inflation of services (excluding regulated prices) remains above the overall level due to high demand.

Core inflation also began to decline and topped 7%. Strong soum contributed to the slowdown in imported inflation and, to a certain extent, stabilized prices for non-food items.

The Central Bank emphasized that in recent months, the ratio of goods and services the prices of which are growing more slowly than a year ago has increased, indicating to an expansion of the price stabilization process.

Inflation expectations of the public and businesses continue to decline, but remain above the current and projected inflation levels. The forecast for the end of the year has been revised downwards – to around 8% (the September forecast was 8.7%).

Economic growth in Q3, according to the Central Bank's estimates, remained high, and is expected to be within 7-7.5% range by the end of the year.

Growth in real incomes and retail lending activity support the purchasing power of households, which, in turn, may keep inflationary pressure. The regulator also warned that the liberalization of energy prices (gas, electricity) and risks associated with the supply of certain goods could have an additional impact on inflation in the coming months.

"Against this backdrop, maintaining relatively tight monetary conditions is necessary to continue reducing inflation," the Central Bank noted.

Reportedly, the current policy contributes to maintaining the attractiveness of savings, balancing aggregate demand, and limiting the impact of monetary factors on inflation.

The Central Bank reiterated its intention to reduce inflation to the target level of 5% in the medium term.

The next meeting of the board on interest rate is scheduled for December 11.