During the board meeting of the Central Bank last evening, and having taken into consideration suggestions of the Monetary Policy Committee, it decided that Lombard rates and the Overnight Deposit Facility remain unchanged at 5,5% and 2,5% respectively. Further, the board decided that the reference point for the annual growth rate of bank credit for 2002 remains at 11%.

Decisions of the board were taken in view of the fact that economic conditions have not notably changed since its meeting in January. Notable developments of the local economy were the rise of inflation in January to 2,70% from 2,37% in December of 2001 and 1,44% for January 2001. As far as the acceleration of inflation, this was mainly attributed to the sharp increase of the price of local agricultural products due to bad weather conditions. In the monetary sector, the first month of the current year, there was a definite decline noted concerning new credit facilities, as well as reduced influx of foreign exchange due to the low level of lending to Cypriots in foreign currency as well as seasonal factors. Further, arrivals of tourists showed a reduction of 15,8%.

Internationally, there are indications that international economy will soon recover but it is still uncertain as to when exactly and to what degree.