The Central Bank’s Monetary Policy Committee (MPC) is keeping key interest rates as is, making it the 8th consecutive hold since mid-2020, as the committee notes slowed economic recovery due to global supply chain disruptions, its heavy reliance on vaccine efficacy and increases in global oil prices.

Convening their meeting on Thursday, the MPC announced that overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 8.25 percent, 9.25 percent, and 8.75 percent, respectively. The discount rate was also kept unchanged at 8.75 percent.

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The MPC decided that keeping policy rates unchanged remains consistent with achieving the inflation target of 7 percent (±2 percentage points) on average in 2022 Q4 and price stability over the medium term.

Annual headline urban inflation jumped to 6.6% in September, up from 5.7% in August which marked a 17-month high by hitting its highest rate since November 2020, while headline annual inflation rose to 8% in September, up from 3.3% in the same month of 2020.

Annual core inflation numbers climbed to 4.8% in September 2021 from 4.5% in August, with annual headline rates affected by unfavorable base effects during September 2021 as expected as well as strong monthly dynamics mainly related to higher tomato prices.

“Global financial conditions are expected to remain accommodative and supportive of economic activity over the medium-term. International prices for oil have continued to increase driven by both supply and demand factors. In the meantime, international prices for commodities such as food and select minerals have continued to increase but at a slower rate,” explained the MPC in an official statement.

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Driven by higher annual contribution of food items, the inflation was accelerated for the 5th consecutive month hitting 10.6% in September 2021 from 6.6% in August 2021.

Partially offsetting this acceleration was the decline in annual nonfood inflation to 4.9% in September 2021 from 5.3% in August 2021, which is the lowest recorded level since December 2012.