This decline was supported by the stringent monetary policy stance exercised by the Central Bank in the recent months and lower international commodity prices. While inflation is expected to gradually pick up from this month, particularly following the recent revision to fuel prices and its impact on domestic prices, inflation, on a year-on-year basis, is expected to remain at single digit levels throughout this year, it further said.

Considering the positive developments in inflation, the Central Bank has been gradually easing its monetary policy stance in order to maintain domestic financial markets liquid and economic activity buoyant.

Meanwhile, the optimistic investor outlook was reflected in the inflow of investments to government securities during the last two months. This also enabled the Central Bank to absorb foreign exchange from the market and build up the county’s foreign reserves. By 10 July 2009, purchases of foreign exchange by the Central Bank in the domestic foreign exchange market, in net terms, became positive, with the Central Bank having purchased a total of USD 652 million, so far in 2009.