Support for decision came from strong growth trajectory, stable CPI trajectory, gradually rising inflation expectations and favorable developments in banking sector. NBS likely to keep key rate at current level throughout 2018 and most of 2019, as all above-mentioned factors should persist in upcoming months. In addition, expected ECB and Fed moves also play important roles.

At the November meeting, the NBS Executive Board kept the key rate unchanged at 3%. The decision was broadly expected after 3Q18 GDP growth of 3.7% y/y showed continuation of positive economic developments and NBS projections show that inflation will remain stable and move inside the target band for the prolonged period of time. According to the NBS, one-year and two-year ahead inflation expectations for both financial and corporate sectors are anchored around 3%. Dynamics in the banking sector are also supportive for such a decision, with falling interest rates and rising credit activity.

Looking forward, we expect the NBS to keep the key rate at the current level throughout the year and most of 2019 as we also expect gradual and steady rise of inflation and a continuation of solid economic trends (growth forecast revised from 3.5% to 4.3% y/y y/y). We expect more hawkish stance from the NBS after the ECB moves expected after summer of 2019.

Download The Full Economic Indicators

This document is intended as an additional information source, aimed towards our customers. It is based on the best resources available to the authors at press time. The information and data sources utilised are deemed reliable, however, Erste Bank Sparkassen (CR) and affiliates do not take any responsibility for accuracy nor completeness of the information contained herein. This document is neither an offer nor an invitation to buy or sell any securities.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: positive mood could prevent the collapse

The shared currency has remained under selling pressure on Friday, amid mounting speculation the ECB will announce a larger-than-anticipated stimulus package next September. EUR/USD capped by a Fibonacci resistance at 1.1110, yearly low at risk.


GBP/USD: economic disruption on a no-deal Brexit to weigh on Sterling

The GBP/USD pair has closed the week with gains, a handful of pips below the 1.2150 level. The Pound advanced for a third consecutive day, helped by some headlines indicating that Jeremy Corbyn, has been in talks with the Scottish National Party.


USD/JPY: short-term advance to be capped by long-term jitters

The USD/JPY has recovered some ground these last few days, to close the week at 106.35. Still, it posted a lower low and a lower high when compared to the previous week, as the Yen benefited from its safe-haven condition on mounting concerns about a US recession. 


Four Signs of A Bear Market

I am a believer that the Universe gives you signs. That may sound a bit crazy, but these three charts are three more signs of a bear market. The top chart is the GLD exchange traded fund.

Read more

Gold gives back territory towards a 23.6% retracement

Gold prices were a touch lower by the end of the week, falling -0.68% having travelled between a high of $1,528.00 to a low of $1,503.87, ending the NY session around $1,513. 

Gold News