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2) The Central Bank changed its monetary policy at a certain date, while keeping the 1-week repo interest rate constant, and lowering the overnight lending
2) The Central Bank changed its monetary policy at a certain date, while keeping the 1-week repo interest rate constant, and lowering the overnight lending rate from 10.75 to 10.50. At the same time, it reduced the share of 1-week repo in funding from 70% to 50%. a) According to this scenario, in what direction is the interest rate in the market expected to change? b) What is the estimated effect of this monetary policy on economic growth, inflation and exchange rate?
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