Central bank: No change in key policy rate

In making this decision, the Executive Board primarily took into account the outlook for inflation and its underlying factors, as well as the effects of past monetary policy easing.

Inflation has been low and stable for five years in a row. It measured 2.0 percent y-o-y at end-2018, this being also its average annual value. Core inflation, which revolved around 1.0 percent in the course of 2018, and inflation expectations of the financial and corporate sectors, which are slightly below the 3.0 percent target midpoint, confirm that inflationary pressures continue to be low. In the coming period too, inflation is expected to remain stable within the target tolerance band (3.0±1.5 percent).

The Executive Board judges that caution in monetary policy conduct is still warranted, primarily because of developments in the international environment. Global growth outlook has weakened, while leading central banks, the Fed and the ECB, recently signaled a possibly slower pace of monetary policy normalization than expected. However, it remains uncertain to what extent the process of normalization will be slower and different from what markets expect, which could bring volatility to global capital flows. Furthermore, potential escalation of tensions in international trade could additionally heighten instability in the international financial market, including in relation to capital flows. Despite the fall in global oil prices in late 2018, both demand- and supply-side factors make their future movements uncertain.

As emphasized by the Executive Board, our economy's resilience to potential adverse effects from the international environment has increased owing to improved macroeconomic indicators and prospects. Public finance recorded a surplus for...