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The minutes of the meeting on August 26 show that the policymakers discussed a single option and took the decision to leave the base rate unchanged in line with the central bank’s stability-oriented approach.
“In the council members’ assessment, maintaining tight monetary conditions was warranted,” according to the minutes.
Discussing the proposal to keep the base rate on hold, the council acknowledged the decline in annual inflation of tradables as a positive development, but stressed that the price dynamics of market services had remained high.
The members agreed that upward risks persisted. A comprehensive evaluation of the effect of incoming data that could affect the inflation path will be made in the MNB’s next quarterly Inflation Report, in September, the minutes said.
Council members agreed that household inflation expectation, identified as a key risk factor in the June Inflation Report, remained “significantly higher” than the level consistent with price stability.
The council was unanimous in its view that “special attention” had to be paid to the development of the external balance.
They also said the stability of the foreign exchange market was “of particular importance” for achieving the inflation target and maintaining financial market stability.
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