The Monetary Policy Board of the Central Bank is holding its eighth monetary policy meeting of the year today, which is the second meeting under the new Central Bank Act. Market expectations are that the rate-setting committee will maintain the current stance, following the third rate cut in early October. First Capital Research has assigned a 60 percent probability for the Monetary Policy Board to leave the key policy rates unchanged, allowing more time for the previous policy easing to take effect in the real economy. The decline in market lending rates and growth in private sector credit are indicators of how the earlier policy easings have influenced key areas in the economy. However, First Capital cautioned against further easing due to certain upside risks to inflation coming from energy and utilities price revisions and the impending increase in the value-added tax slated for next year.
