The Monetary Policy Board arrived at this decision after carefully assessing the current and expected macroeconomic developments and possible risks on the domestic and global fronts with a view to maintaining inflation at the targeted level of 5 per cent over the medium term while supporting the economy to reach its potential.

It has observed the need for a further reduction in market lending interest rates in line with policy interest rates and other benchmark interest rates, which is imperative for the easing of domestic monetary conditions and domestic economic recovery.

The Board re-emphasized the need to pass the benefits of eased monetary conditions to the borrowers without further delay. Headline inflation is expected to converge to the targeted level over the medium term, despite transitory volatilities.