Economic activity accelerates in September
Economic activity growth in September exceeded 3% y/y, for the first time in 2023. But the Central Bank, aiming to ensure that months of reduced economic growth have been left behind, has further eased monetary policy. In October a new $0.7 billion quick liquidity facility was created, and on October 31st, the monetary policy interest rate was cut by 25 bps, for a cumulative reduction of 125 bps from its May 23rd peak.
Credit expansion to the private sector in October continued at historically high rates since 2009, exceeding 18% annually since June. This situation is consistent with the 51 bp reduction in the average lending rate in October, compared to September.
The exchange rate remained relatively stable in October, with monthly depreciation of -0.05% in the sale rate. There was simultaneously a $0.5 billion reduction in international reserves. Tourism and remittance income continued to grow robustly, unlike goods trade. As a result, the current account deficit contracted by 42% in January-September 2023, compared to the same period in 2022.
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