At the meeting of the Central Bank Board on January 25, 2024, a decision was made to leave the refinancing rate unchanged at the annual level of 14 percent.

"The created monetary and credit conditions are aimed at ensuring the trajectory of a stable reduction of inflation to the target level of 5 percent.

Headline inflation has remained at 8.8 percent in recent months. Despite the decrease in inflation in the group of goods in the consumer basket, inflation in services slightly accelerated in the last quarter. This indicates that demand-side pressures on overall inflation are likely to intensify in the future. In general, the emergence and persistence of inflationary processes in the economy is explained by the inability of some supply components to fully adapt to the conditions of high demand," said the official release of the Central Bank.

In 2023, the acceleration of economic growth to 6 percent, and the high rate of growth of the volume of investments in fixed capital became important. Positive dynamics of loans allocated to the economy, high fiscal incentives and remittances were among the factors supporting economic growth.

It is expected that global inflation will continue to rise this year due to the strong financial conditions in the world economy, the balancing of labor markets and the decreasing dynamics of commodity prices.

Taking into account the current economic trends and expectations of trading partners, it is estimated that there will not be high pressures on the real exchange rate of the soum in the coming months.

Along with the reduction of the structural surplus in liquidity in the banking system, the activation of operations in the money market is being observed. Conditions are being created for the formation of short-term interest rates in the money market within the framework of the interest corridor with the active use of monetary operations.

In the conditions of high positive real interest rates on deposits in national currency, the growing dynamics of the volume of bank deposits are expected to be maintained.

According to updated forecasts, general inflation in 2024 is expected to be 8-9 percent, and the base inflation rate is expected to be around 7-8 percent in the main scenario.

The macroeconomic development scenario this year will depend on external economic factors and internal factors of macroeconomic stability, i.e. the rate of structural reforms, fiscal discipline, and the effectiveness of monetary policy.

Meanwhile, measures are being taken to mitigate the potential one-time impact on domestic prices in the coming months due to expected changes in some regulated prices, recent changes in excise duty and value-added tax.

The main external risks will be related to the increase in global fragmentation and the long-term persistence of high global inflationary processes.

Real GDP growth is forecasted to be around 5.5-6 percent. The main factors of economic growth are, on the one hand, consumer demand, and on the other hand, an increase in the volume of foreign and domestic direct investments under the influence of structural reforms.

The Central Bank will make future decisions on the key rate based on the updated general inflation forecasts and will provide the necessary monetary and credit conditions to achieve the 5 percent inflation target.

The next meeting of the Central Bank's management to review the interest rate is scheduled for March 14, 2024.