Central Bank Holds at 14% as Inflation Eases

The policy rate remained 14% per annum. Headline inflation slowed to 10.4% in May, while core inflation was 12.4%.

The policy rate remained at 14% per annum at the June policy meeting. Headline inflation slowed to 10.4% in May, while core inflation remained higher at 12.4%.

Inflation expectations were 13.7% for households and 13.5% for businesses. Individual and corporate deposits grew 20.8% and 17.0%, respectively. Total loans grew 22.8%, while retail lending expanded about 1.5 times.

The combination of disinflation and rapid credit growth matters for bank expansion, asset quality and duration positioning; each growth measure relates to the period specified by the regulator.

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