National Bank’s monetary policy may help curbing inflation in 2016

According to the National Statistics Committee, in April 2016, inflation stood at 0.7% and since early 2016 consumer prices rose by 6.4% with an annual forecast at 12%. The main influence on inflation had the increase in the housing and utility tariffs amid reduced household incomes and lower import prices on products. With the decline in money supply by the National Bank and the administrative burden on suppliers by the public authorities, inflation may further reduce to 0.5-0.6% per month. The decline in inflation may allow the National Bank to continue to lower interest rates in the economy, which will reduce the financial burden on businesses and will cut production costs.