DUSHANBE (Reuters) – Tajikistan’s central bank (NBT) cut interest rates to a historic low of 6.8% on Wednesday, its fourth reduction since December, in response to slowing inflation in Central Asia’s poorest economy.

The bank cut the key refinancing rate from 8.0% with immediate effect, taking borrowing costs below a previous low that had equalled levels reached after the global financial crisis of 2008-2009.

“The change was introduced because of a decrease in inflationary pressure and outside influences, as well as with the aim of providing an effective monetary and credit policy,” the central bank said in a statement.

Inflation in Tajikistan slowed to 2.3% between the end of December 2011 and the end of May 2012, compared with 6.9% in the corresponding five months of the previous year.

Annual interest on loans issued in local currency by Tajik commercial banks averaged 23.68% in May, compared with 25.1% in the same month last year.

The refinancing rate is one of the instruments of monetary regulation, by which NBT affects the interbank market, as well as the interest rates on loans and deposits.