CBRT holds key rate at 37.0%, as expected

The underlying trend of inflation, which increased in April due in part to higher energy prices, following its rise in the first months of the year, decreased slightly in May. Amid geopolitical developments and the resulting uncertainties, energy prices remain volatile and elevated. First-quarter data point to a slowdown in economic activity, and leading indicators suggest a continued weak course in domestic demand. The impact of geopolitical developments on the inflation outlook through the cost channel, economic activity and expectations is closely monitored. Reiterates that the tight monetary policy stance, which will be maintained until price stability is achieved, will strengthen the disinflation process through demand, exchange rate, and expectation channels. The Committee will determine the policy rate by taking into account realized and expected inflation and its underlying trend in a way to ensure the tightness required by the projected disinflation path in line with the interim targets. In case of unanticipated developments in credit and deposit markets, monetary transmission mechanism will be supported via additional macroprudential measures. Liquidity conditions will continue to be closely monitored and liquidity management tools will continue to be used effectively.