NBM Increased Base Rates
OREANDA-NEWS. February 01, 2010. At the same time, the norm of mandatory reserves from the resources attracted by the banks remained unchanged - 8%. As it is noted in the press release disseminated by the National Bank, these decisions are temporary and are aimed at bringing inflation at the planned + / -5%.
The decision to raise the base rate was adopted in order to stabilize inflationary pressure and inflationary expectations. In this regard, the NBM will resume sterilization of the excess liquidity in strict accordance with the announced schedule. According to the NBM experts, the increase in the base rate and full sterilization of the money mass does not threaten the liquidity of the banking system. "The volume of liquidity in the banking system is adequate for the normal activity of the banks as well as for resumption of active lending the national economy", - considers NBM.
At the same time, the National Bank noted that raising the rates on the short-term deposits and loans aims at reducing the volatility of the money market and creating equal conditions for all market participants. Along with these measures, the NBM will monitor the macroeconomic indicators and situation at the monetary, currency and credit markets and will quickly respond to all external and internal challenges.
According to the NBM forecasts, in the medium term the inflation level will be mainly affected by the development of the currency market, increase in taxes and excise duties, higher prices for gas, electricity and heat. Possible increase in the previously planned inflation rate will have temporary and short-term character. According to the NBM forecasts, in 2010 inflation will be high in II and III quarter of 2010 and by the end of the year will reach 5-7%. "Simultaneously with the reduction in inflationary pressures, in I quarter of 2011 the National Bank expects to return the inflation to the planned level.
This scenario will create prerequisites for the increase in GDP in 2010 by 1,2-3,3% ", - said the National Bank. A more detailed analysis of the inflation forecast will be presented in the Report on monetary policy, which will be published on February 5. The next meeting of the NBM Administrative Board will be held on February 25.
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