07/03/2003 14:56
Downward review of estimates for growth rate
The Central Bank of Cyprus has proceeded to a downward review of its previous estimates for the growth rate of 2003, while the degree of downward review will become even larger in case of a possible American intervention in Iraq, said the CB Governor, Christodoulos Christodoulou.
Mr. Christodoulou said that the performance of the inflation index during the firs two months of the year confirms CB’s estimates for 2003 that inflation is to fluctuate to 4%-4.5%, mostly affected by the VAT and petrol. The CB Governor confirmed that inflation in February reached 4.4%, while core inflation stood at 2.2%-2.5%.
Meanwhile, the Monetary Policy Committee has decided that the basic interest rates, that is the Lombard rate and the over night deposit facility rate, remain unchanged at 5% and 2.5% respectively ahead of the uncertainty due the negative geopolitical developments in the region that affect, the international economic growth. The decision of the Committee was also based on the fact that despite the negative developments the European Central Bank decide to cut interest rates by only 0.25% while the Central Bank of England has kept its interest rates unchanged. The reference value of the annual growth rate of bank credit will also remain at 11%.
It is noted that the Central Bank has kept its interest rate unchanged, since within the framework of estimates the domestic economic activity seems to develop satisfactorily.
Finally, the Committee states in its decision that will be abreast of the developments and will be ready to take the proper measures if needed.
The Central Bank of Cyprus has proceeded to a downward review of its previous estimates for the growth rate of 2003, while the degree of downward review will become even larger in case of a possible American intervention in Iraq, said the CB Governor, Christodoulos Christodoulou.
Mr. Christodoulou said that the performance of the inflation index during the firs two months of the year confirms CB’s estimates for 2003 that inflation is to fluctuate to 4%-4.5%, mostly affected by the VAT and petrol. The CB Governor confirmed that inflation in February reached 4.4%, while core inflation stood at 2.2%-2.5%.
Meanwhile, the Monetary Policy Committee has decided that the basic interest rates, that is the Lombard rate and the over night deposit facility rate, remain unchanged at 5% and 2.5% respectively ahead of the uncertainty due the negative geopolitical developments in the region that affect, the international economic growth. The decision of the Committee was also based on the fact that despite the negative developments the European Central Bank decide to cut interest rates by only 0.25% while the Central Bank of England has kept its interest rates unchanged. The reference value of the annual growth rate of bank credit will also remain at 11%.
It is noted that the Central Bank has kept its interest rate unchanged, since within the framework of estimates the domestic economic activity seems to develop satisfactorily.
Finally, the Committee states in its decision that will be abreast of the developments and will be ready to take the proper measures if needed.
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