Ukraine Monetary Policy September 2016


Ukraine: Central Bank continues easing cycle in August

September 15, 2016

Stabilizing inflationary pressures in Ukraine’s tattered economy prompted the National Bank of Ukraine (NBU) to decide to cut the key policy rate from 15.50% to 15.00% at its 15 September monetary policy meeting. The decision marked the Bank’s fifth consecutive cut.

In its accompanying statement, the Central Bank outlined that price pressures have eased thanks to weak domestic demand, tight monetary policy and a large supply of food products. The Bank left its inflation forecast unchanged and sees inflation rising to 12% by the end of the year due to increased tariffs for public utilities. Looking forward, the NBU stressed that completion of the second program review under the IMF arrangement is key for improving government finances and investors’ expectations. The Bank added that, “in the view of uncertainty as to external market situation, the NBU maintains sufficiently restrained monetary conditions.” The next monetary policy meeting is scheduled for 27 October.

FocusEconomics Consensus Forecast panelists expect the NBU’s key policy rate to end the year at an average forecast of 14.19%. For 2017, panelists expect the key policy rate to fall to 10.64%.

Author: Angela Bouzanis, Senior Economist

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Ukraine Monetary Policy Chart

Ukraine Monetary Policy August 2016

Note: NBU key policy rate in %.
Source: National Bank of Ukraine (NBU).

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