Key Policy Rate Raised to 12.50 Percent
After reviewing current economic developments at its meeting today, the NBS Executive Board voted to raise the key policy rate by 0.25 percentage points to 12.50 percent.
The key generator of inflation is still the unexpectedly high food price hike, spurred by global developments and the existing systemic solutions in the field. At the same time, prices of non-food products are stable and consistent with the inflation target.
One-off inflationary pressures driven by robust food price growth are likely to subside with the start of the new agricultural season in July 2011, which will generate disinflationary effects. Aggregate demand will be another disinflationary factor in the coming period.
By raising the key policy rate by 0.25 percentage points the NBS aims to bring medium-term inflation within the set targets.
The next rate-setting meeting of the NBS Executive Board will take place on 12 May 2011.