Central Bank Leaves Rates Unchanged as Inflation Cools
BI Board of Governors Hold BI-Rate at 625
CPI Unchanged in May, Easing Inflation Concerns
In a move that surprised many economists, the BI Board of Governors has decided to maintain the BI-Rate at 625 while also maintaining the Deposit Facility DF. This decision comes amidst growing concerns about slowing economic growth and the potential for a recession.
The Board's decision was based on several factors, including the recent release of the CPI data, which showed that inflation has moderated from pandemic-era growth. The CPI for all items was unchanged in May on a seasonally adjusted basis after rising 0.3 percent in April. This was the first time that the CPI has not increased in a month since May 2020.
The Board also noted that the May CPI report showed that prices continued to moderate from pandemic-era growth, easing worries that inflation would continue to accelerate. The core CPI, which excludes food and energy prices, rose by 0.3 percent in May, the smallest increase since March 2020. This indicates that underlying inflation pressures are starting to cool.
Comments