The Board of the Central Bank, taking into account the continuing uncertainties in the economy in terms of achieving a balance of supply and demand, as well as pro-inflationary expectations, decided to leave the main rate unchanged in order to ensure the necessary monetary conditions to reduce inflation to the 5% target.

Overall inflation has decreased since the beginning of the year and amounted to 8.3% in February. However, in recent months, against the background of rising demand and increases in a number of regulated prices, inflation in the service sector has accelerated. In addition, inflation expectations of the population and entrepreneurs remain almost unchanged and high. It is expected that by the end of this year, the inflation rate will be within 8-9% of the forecast range. In the forecast period, uncertainty remains regarding changes in regulated prices and their impact on inflation expectations.

According to preliminary data, the main indicators of production grew at a higher rate than in January-February last year. At the same time, the slowdown in production dynamics in some industries since the beginning of the year, in particular food, may cause a discrepancy between supply and demand in the domestic market in the short term or create additional pressure on imports.

In general, economic growth indicators for the first quarter will be relatively high, and in subsequent quarters, expectations for the formation of indicators within the framework of the basic forecast at the level of 5.5-6% are increasing.

High budget expenditures last year and at the beginning of this year will be one of the main drivers supporting overall consumer activity in the coming quarters. At the same time, the formation of cross-border money transfers within last year's indicators and the current growth rates of real incomes of the population will not create additional pro-inflationary pressure on consumer demand in the future.

There is high activity in the labor market. The main growth in demand for labor is in the service sector, which also leads to the formation of high wages in this sector.

At the same time, in conditions of steady growth in prices and incomes in the service sector, the volume of investments in these sectors of the economy and their share in current consumer spending will increase.

There is a high growth in imports of machinery and equipment, energy resources and petroleum products, ferrous metals, which, on the one hand, creates the basis for a future increase in production volumes, and on the other hand, also means maintaining a trade deficit. Achieving a balance in the current account balance will depend on compliance with established budgetary discipline, foreign investment flows and the effectiveness of structural reforms aimed at developing the export potential of the economy.

Relatively tight monetary conditions will continue in the coming quarters. Against the background of high activity in the interbank money market since the beginning of the year and an increase in the use of monetary instruments, the UZONIA interest rate will be formed close to the main rate.

Savings activity will continue to increase and manifest itself in an increase in the volume of deposits in the national currency. In general, it is expected that the annual growth rate of deposits will significantly exceed the growth in lending.

The increase in the share of domestic and private sources in the resource base of banks, in turn, is reflected in market interest rates. There has been no significant change in the weighted average interest rates on loans in the national currency in recent months.

At the same time, recent changes in the operational mechanism of monetary policy by reducing the cost of short-term money will create the basis for further reduction of interest rates on loans.

The Central Bank will continue to implement a consistent monetary policy aimed at achieving the 5% inflation target. At the same time, special attention will be paid to the balance of supply and demand in the economy, inflation expectations and the dynamics of regulated prices.

The next meeting of the Central Bank's board to review the main rate is scheduled for April 25, 2024.