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The Board of the CBA left the refinancing rate unchanged 8.0%

In the October 11, 2011 Meeting the Board of CBA decided to leave the Refinancing Rate of CBA unchanged, at 8 percent.

In September inflation was 0.8 percent, and the 12-month inflation grew by 1.4 pp against the previous month’s indicator and reached 6.2 percent, as a result. Back in September the Board of CBA had outlined that the 12-month inflation would most likely be near or above the confidence band and had it published in the September 16th Minutes of the Refinancing Rate.

The Board accepted that impulses coming from the external sector remain neutral to the inflationary environment. Yet the developed countries’ macroeconomic policy responses to their fundamental imbalances remain uncertain.

The Board believes that impulses coming from the domestic economy create largely a contractionary impact on inflationary environment when impacts from the labor market, private spending, fiscal and monetary policies are summed up. These impacts in future will be greatly depending also on the developments in the external sector.

The Board summed up that inflation developments in the last couple of months are in line with the trajectory outlined in the 2011 monetary policy programs. Though in endSeptember inflation outstripped the upper border of the confidence band, it is expected to slow down gradually in the upcoming months. Interest rates which exist and which are expected in the financial market after 0.5 pp decrease of the Refinancing Rate in September will allow shaping a level of aggregate demand, which will bring inflation into the confidence band of 4%±1.5 pp, provided that risks deriving from uncertainties show up to a moderate extent.