Ukraine Monetary Policy


Ukraine: Central Bank continues to cut interest rate

September 24, 2015

At its 24 September Monetary Policy meeting, the National Bank of Ukraine (NBU) decided to cut the discount rate from 27.00% to 22.00%. The move marks the second cut in a row as the NBU continues to ease its monetary policy stance and support Ukraine’s economic recovery.

In its accompanying statement, the Central Bank commented that reduced inflationary risk has allowed the NBU to proceed with a gradual withdrawal from its “expensive money” policy. Sound monetary and fiscal policy has muted price pressures in recent months and stabilized the foreign exchange rate market. The Bank added that the recent trend of restrained inflation is likely to continue thanks to low commodity prices, a stable money market and lower expectations driven by the country’s successful cooperation with international creditors. Moreover, planned adjustments of administered prices and long-term increases in social benefits are unlikely to raise inflationary pressures.

Against this backdrop, the Central Bank decided to ease the monetary policy stance and reduce the discount rate from its historically high level. The Bank expects that this easing will help support a recovery of Ukraine’s economy. The next monetary policy meeting is scheduled for 29 October.

FocusEconomics Consensus Forecast panelists expect an average forecast of 22.50% for the NBU’s discount rate this year. For 2016, panelists expect the discount rate to fall to 14.68%.

Author: Angela Bouzanis, Senior Economist

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Ukraine Monetary Policy Chart

Ukraine Monetary Policy September 2015

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

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