The Board of the Central Bank adopted a decision to increase the refinancing rate to 14% per annum. The decision takes effect on June 28.
This decision is due to the acceleration of inflation in the intervening period and the need to limit the increased risk of inflation.
Along with seasonal fluctuations and supply factors, the inflation level was influenced by monetary factors such as the accelerating growth of lending to the economy and the devaluation of the national currency compared to last year.
In this situation, the effective interest rates lead to higher speculative demand for credit resources and the emergence of inflationary spirals.
Under these conditions, the decision to raise the refinancing rate of the Central Bank is considered as an effective anti-inflationary measure, aimed at:
– limiting the influence of monetary factors on the growth of the price level and inflation risks, keeping inflation within the target parameters;
– ensuring positive real interest rates and balanced conditions of lending to the real sector of the economy;
– creating preconditions for transition to the market formation of exchange rate;
– formation of favourable economic conditions for the development of entrepreneurship by ensuring price stability and low inflation expectations, stimulating investment in the medium and long term.
The Central Bank will continue its focused work to prevent the growth of prices and the formation of a stable and low inflation expectations in the economy.
The refinancing rate will be revised downward as prices in the consumer market shall be stabilised and inflationary risks reduced.
