By a decision of the Board of the Central Bank, the CB base rate remained unchanged at 16% per annum, the press service of the bank reports.
It was noted that this decision is made due to the fact that it takes some time to be fully convinced of the downward trend in inflation. There is some uncertainty about the increase in regulated prices.
At the same time, it is stated that there is a possibility of further revision at the next Board meetings to slightly lower the base rate.
Inflation dynamics and forecasting
At the end of 2019, inflation was close to the upper limit of the forecast corridor (13.5-15.5%) and amounted to 15.2%.
Inflation rate has accelerated mainly in the second half of the year following the liberalization of regulated prices (an increase of 21.6%), as well as the devaluation of the national currency in August 2019.
In 2019, the highest increase in prices was observed for flour and bakery products (24.8%), meat products (23.4%), fruits and vegetables (14.5%), and passenger transportation (13%).
In October-December 2019, the quarterly inflation rate declined from 5.7% to 5% compared to the same period in 2018.
Foreign and domestic economic conditions
According to preliminary estimates, GDP growth in 2019 was 5.6%. Despite the slowdown in global economic growth, the stimulating fiscal and credit policies, as well as the positive dynamics of prices for the main export commodities provided favorable conditions for economic growth over the past year.
At the same time, according to the forecasts, the accelerating growth of credit investments and public expenditures on the economy in 2018-2019 will remain moderate in the first half of 2020.
Monetary conditions
In the last quarter of 2019, interest rates on the money market were formed by the impact of various factors and market trends. The nature of their change was significantly different from the previous quarter.
