Interest Rate Cut Aims to Boost Growth and Control Inflation

Today, the central bank announced a reduction of the policy interest rate by 25 basis points to 4. A fourth consecutive cut since June, this decision is rooted in two key considerations: easing headline and core inflation and a desire for economic growth to absorb existing economic slack. Lower inflation rates are now closer to the expected target of 2%, leading to the decision for further rate cuts if this trend continues. This adjustment influences the overnight interest rates, which directly impacts banks and financial institutions borrowing. Subsequently, prime rates will be adjusted swiftly, typically within 24 hours, affecting lines of credit and variable rates accordingly. Individuals looking to refinance fixed-rate mortgages will also feel the impact, as lower rates will be reflected during the refinancing process. The expectations are set high on the banks continuing to conduct their financial activities in line with the new rate adjustments, targeting a significant economic boost, while keeping inflation under control.