The European Central Bank reduced interest for 25 more basin points

The decision to reduce interest on a cash deposit, which directs the monetary policy, is based on, as stated, on an updated inflation assessment, the dynamics of the base inflation and the power of monetary policy transmission.

Following this decision, interest on the cash deposit is 2.75%, the interest rate for the main refinancing operations 2.9%, and the interest rate on the borderline credit line 3.15%

– The process of reducing inflation is in good flow. Inflation develops mainly in accordance with projections and is expected to return to the target level of 2% during this year. Most basic inflation indicators suggest that inflation will stabilize in the long run on that goal. Domestic inflation remains high, as salaries and prices in some sectors still adapt to the previous increase in inflation, but with delay. However, salary growth slows as expected, while profits partially relieve inflationary pressure – the ECB was announced.

Reducing interest rates gradually makes new borrows more favorable for companies and households, eKapija transfers. However, funding conditions remain strict due to restrictive monetary policy and previous increase in interest rates, which still affect loans.

It is added that the economy continues to face challenges, but the growing realistic revenues and gradual weakening of the effects of restrictive monetary policy should contribute to the increase in demand in the future.

– Administrative Council remains committed to inflation stabilizes on a sustainable 2%. Decisions will be made on the basis of new data to determine the appropriate direction of monetary policy. The decisions on interest rates will be based on the assessment of inflation, taking into account economic and financial data, the dynamics of base inflation and monetary policy effects. The administrative Council will not determine the path of interest rates in advance – the statement said.