The Central Reserve Bank (BCR) raised the reference interest rate again by 25 points to 7.75%, thus continuing with the adjustments of the monetary policy position.
The issuing entity’s decision responds, among other things, to the fact that the 12-month inflation rate went from 8.45% in November to 8.46% in December due to the higher prices of food produced in the country.
Another reason for the increase is a consequence of the significant rise in international energy and food prices since the second half of 2021.
“The growth prospects for world economic activity have been diminishing due to the effects of restrictive monetary policy in advanced economies, the impact of inflation on consumption and international conflicts,” added the Central Reserve Bank.
On the other hand, the BCR projected a downward trend in year-on-year inflation since March, with which the indicator would be within the target range (between 1% and 3%) in the last quarter of 2023.
“The board of directors is especially attentive to the new information regarding inflation and its determinants, including the evolution of inflation expectations and economic activity, in order to consider additional modifications in the monetary policy position. The Board of Directors reaffirms its commitment to adopt the necessary actions to ensure the return of inflation to the target range in the projection horizon,” he said in a statement.