The Monetary Policy Committee has concluded its meeting and presented the highlights of recent economic developments that have shaped the Committee’s view of the outlook and informed its decision on the stance of monetary policy going forward as follows:

The Outlook and Risks

?    In sum, the Committee noted that economic activity continued to improve supported by a rebound in crude oil production, and is expected to
remain in line with trends seen in the first half of the year. The Bank’s CIEA also provides some positive indications of expected increased momentum in economic activity. The broad expectation is that the gradual and steady increases should translate to higher growth profile in the period ahead. In addition, implementation of fiscal policy measures towards providing stimulus through the key initiatives contained in the 2017 budget statement should provide added impetus to growth.

?    The disinflation process is still ongoing and this trend is likely to continue all through till the end of the third quarter. Barring any unanticipated shocks, the current stance of monetary policy and expected stability in the exchange rate should ensure price stability. In the outlook, expectations are for the observed decline in headline inflation to continue and converge towards the medium-term target in 2018.

?    Given these considerations, the Committee decided to reduce the Monetary Policy Rate by 150 basis points to 21 percent.