The Central Bank reduced its policy interest rate, the one-week repo auction rate, from 43% to 40.5%, the second straight cut.
The Monetary Policy Committee also lowered the overnight lending rate from 46% to 43.5% and the overnight borrowing rate from 41.5% to 39%, according to a statement from the bank.
The decision takes the policy rate to the lowest level since the end of 2023 and follows a sustained slowdown in inflation.
The bank said the main trend of inflation slowed in August, and while growth in the second quarter exceeded forecasts, domestic demand remained weak. Recent data suggests that demand conditions are at a disinflationary level, according to the statement.
The bank said its efforts to slow inflation face risks from inflation expectations, pricing behavior, and worldwide developments. Food costs and the high inertia of service products are also pushing inflation up, it said.
It underlined that the strict monetary policy would be upheld until price stability was attained, and that doing so would reinforce the disinflation process through channels related to demand, exchange rates, and expectations. It was mentioned that the Medium-Term Program's macroeconomic framework would support this process as well.
The bank’s medium term goal is inflation of 5%. The rate was 32.95% in August.
