While these measures have been successful in improving banks’ access to private credit and countering financial fragmentation, broader financing conditions – foremost the cost of borrowing from banks – have been exceptionally sluggish in responding to the monetary policy accommodation that was introduced. As a consequence, monetary and credit dynamics have followed a protracted, negative trend until very recently.
Against this backdrop, and in view of a persistently weak inflation outlook, we decided in June and then in September to adopt a number of monetary policy measures. With these monetary policy decisions, we have moved from a monetary policy framework based predominantly on passive provision of liquidity to a more active and controlled management of our balance sheet.