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In the summary of the meeting of the Monetary Policy Committee held on Thursday, where the policy rate was kept constant at the level of 10.25 per cent, it was emphasized that the recovery that began in May with the gradual steps of normalization of the economy strengthened with supportive policies and said: “The rapid recovery of the economy with strong credit momentum and financial market developments As a result, inflation has followed a higher course than expected”.
Noting that a significant tightening of financial conditions has been achieved through measures taken in the area of monetary policy and liquidity management to control inflation expectations and limit the risks to the inflation outlook, the Committee stated: ” In this regard, the Committee made it possible to increase flexibility in liquidity management and to increase inflation prospects by keeping the policy rate constant. It decided to continue liquidity measures until improvement is achieved “and added:
“In addition to the slowdown in loan growth with tightening financial conditions, and the continuation of the upward trend in the weighted average cost of funding in the next period, it will positively affect the inflation outlook.
“The effects of further tightening measures on price behavior, inflation expectations and prospects will continue to be closely monitored.”
It was stressed that the restoration of the disinflation process is of great importance in terms of decreasing the country’s risk premium, decreasing long-term interest rates and strengthening the economic recovery, and it was stated that the orientation will be maintained. cautious in monetary policy to achieve the decrease in inflation in line with the target path.
“In this framework, the monetary orientation will be determined in such a way as to guarantee the continuity of the decline in inflation, taking into account the indicators of the underlying trend. The Central Bank will continue to use all the instruments at its disposal in line with the objective of price stability and financial stability “. (DHA)
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