The Central Bank has maintained the key interest rate at 13.5% per annum.

As noted in the press release from the Central Bank, "in recent months, against the backdrop of sustained high demand in the economy and upward pressure on prices, the pace of inflation decline has been slower than forecasted, alongside the formation of elevated inflation expectations." It is anticipated that by the end of 2024, overall inflation will be near the upper boundary of the projected corridor.

It has been highlighted that "the current level of monetary policy rigidity has been maintained to reduce inflationary processes and expectations, as well as to create conditions to achieve a 5% target in the medium term."

According to the Central Bank, the annual inflation rate has slightly decreased over the past two months, reaching 10% by the end of November. This decline in inflation is primarily due to the stabilization of food prices. At the same time, there are ongoing risks of price increases for services and non-food goods, linked to high aggregate demand supported by consumer and investment activity in the economy.

"Changes in certain expenditures related to the primary needs of the population, along with the manifestation of secondary effects of energy price liberalization amid colder weather, are reflected in the inflation expectations of economic agents. In November, inflation expectations among the population and entrepreneurs rose to 13.7% and 12.7%, respectively," the regulator's press release states. It is also mentioned that over the past four months, core inflation has remained relatively unchanged at around 7%.

The Central Bank also noted an increase in gross domestic product in the second half of 2024, which demonstrates a stable trend and is expected to be at 6-6.5% by the end of the year.

"In the context of rising real incomes, effectively restraining inflationary processes in the economy requires ensuring a balance between aggregate demand and supply, which, in turn, necessitates maintaining the current level of monetary policy rigidity," the Central Bank explained.

Taking into account these and other factors, as well as aiming to ensure medium-term price stability, the Central Bank's board has decided to keep the key interest rate unchanged at 13.5% per annum.

Additionally, it is noted that if there arises a likelihood and basis for strengthening the current high demand and price pressures in the economy in the upcoming quarters, the key rate may be revised upwards.

The next board meeting of the Central Bank to review the key interest rate is scheduled for the new year, January 23, 2025.