Central bank maintains cautious stance on monetary policy.
Central bank maintains cautious stance on monetary policy. The Central Bank said that the mismatch between the medium-term inflation expectations and the targets, the risks related to services prices and uncertainties in the global economy necessitate the monetary policy to remain cautious in the medium term. The central bank released the summary of the monetary policy committee meeting held on Nov 23, where the monetary authority decided to keep its key ON borrowing and lending rate unchanged at 17.5% and 22.5%, as expected. The central bank said that the continuation of the EU accession process and the uninterrupted implementation of the structural reforms are still crucial in terms of medium and long-term outlook. The monetary authority noted the significant slow down in the demand for private expenditure groups such as durable goods and housing while underlined that external demand remains relatively strong. Despite the fact that increase in oil prices came to a halt in recent months, said the central bank, lagged effects of the past increases on natural gas prices have been observed.