The Board of the Central Bank on Thursday cut the interest rate by 1 percentage point to 14% per annum. This decision was due to the projected slowdown in the inflation, to the need to maintain positive real interest rates in the economy, as well as to achieve a balance between the inflation target and the maintenance of economic activity in the light of the pandemic,” the regulator noted.
At the same time, the absence of marked pro-inflationary factors in the horizon gives monetary policy room for mitigation without future inflationary risks.
The Central Bank projects inflation to be at 11-12.5% with an increase in the probability to be closer to the lower boundary of the projected corridor. With a steady decline in inflationary expectations and maintaining macroeconomic stability, this forecast may be revised downward.
It is also noted that the Central Bank, together with the government, will take all necessary measures to achieve a constant inflation target by 2023 at the level of 5%.