The central bank raised its benchmark interest rate to 4 percent on Thursday, marking its first increase in more than three years and lifting borrowing costs from the previous 3.75 percent level. The decision, announced following the bank’s latest policy meeting, aligns with the expectations of most analysts, who had widely forecast the quarter-point move amid persistent inflationary pressures across the economy. Policymakers cited the need to anchor inflation expectations and return price growth to target as the primary rationale for the hike, noting that underlying price measures have remained elevated despite earlier signs of moderation.
The increase carries immediate implications for households and businesses, with variable-rate mortgages, consumer loans, and corporate credit lines set to adjust upward in the coming weeks. Economists said the move signals a cautious shift toward tighter monetary policy, though several noted that future decisions will depend heavily on incoming inflation and employment data. Financial markets showed a muted reaction, as the hike had been largely priced in beforehand. The central bank is scheduled to publish updated economic projections alongside its next policy statement, which analysts will scrutinize for clues on the pace of further tightening.
Independent reporting synthesized from primary wires and global correspondents.