At today’s meeting of the Monetary Policy Committee (MPC), the following monetary policy decisions were taken:
The official interest rates of the Central Bank of
During its meeting, the MPC noted the fall in domestic inflation to 2,94% in January, compared with 4,20% in the previous month, which reversed the upward trend in prices during the second half of 2004. Despite the reduction in inflation recorded in January and the relatively low level in inflation forecasted for 2005, the inflationary pressures have not completely seized to exist, mainly due to the uncertainty prevailing in oil prices. The encouraging developments regarding public finances have contributed to the containment of inflation. The MPC estimates that the reduction in the level of the fiscal deficit will be substantially lower than 5,2% as originally estimated. However, the MPC stresses the efforts for fiscal discipline and consolidation should continue in the same pace, in order to achieve the goals set out in the Convergence Programme, which was submitted to the European Union.
In view of the above, the MPC decided the decrease of the official interest rates of the Central Bank of Cyprus by 25 basis points.