NBH Say Monetary Conditions Need to Remain "Tight"

Highlights from the policy statement:

• In the Monetary Council’s assessment, it is necessary to maintain tight monetary conditions in order to achieve price stability.
• In order to achieve price stability in a sustainable manner, monetary conditions need to remain tight.
• At today’s meeting, the Council left the base rate unchanged at 13 percent. Taking a cautious approach to changing the base rate is warranted in order to address fundamental inflation risks.
• Following today’s decision, the base rate will become the effective central bank interest rate. In addition, according to the Council’s decision, the interest rate corridor became symmetric, with a band of +/- 100 basis points around the base rate.
• From 1 October, the reserve account will be available to banks without an upper limit and the Bank will remunerate the part bearing interest at the base rate.

• Central bank sees 2023 CPI in 17.6%-18.1% range
• Central bank sees 2024 CPI in 4%-6% range
• Central bank sees 2023 GDP in -0.5% to +0.5% range
• Central bank sees 2024 GDP growth in 3%-4% range

Press release on monetary policy simplification here.

Policy statement here.