Additionally, the Committee has adjusted the monetary policy operational framework by setting the Central Bank overnight borrowing and lending rates 300 basis points below and above the one-week repo auction rate, respectively.

The decision comes amid concerns about persistent inflation, particularly in the services sector. Despite a slowdown in imports and improvement in the current account balance, domestic demand remains strong, contributing to upward price pressures.

The Central Bank aims to maintain a tight monetary stance until inflation shows a significant and sustained decline. They project disinflation to begin in the second half of 2024.

The Bank also emphasized its commitment to financial stability and will continue using macroprudential tools to manage credit growth and deposit rates. They will closely monitor market liquidity and utilize sterilization tools to ensure price stability.

This move signals the Central Bank's determination to bring down inflation and achieve its medium-term target of 5%. They will base future policy decisions on data and closely monitor inflation trends, employing all available tools to achieve their goals. (ILKHA)