The motherland monument in Ukraine

Ukraine Monetary Policy January 2019

Ukraine: Central Bank holds the key policy rate stable in March

At its 14 March meeting, the National Bank of Ukraine (NBU) held the key policy rate stable at 18.00%, leaving it at a near three-year high. The decision marked the fifth consecutive meeting where the policy stance remained unchanged and was in line with the expectations of market analysts.

The Bank’s decision came against the backdrop of gradually receding inflationary pressures at the beginning of 2019—in line with the Bank’s early-year predictions—and ahead of the unpredictable presidential election scheduled for 31 March. Inflation moderated from 9.2% in January to 8.8% in February, the lowest reading in over two years. As a result, it edged closer to the Central Bank’s 6.5% plus or minus 2.0 percentage points target range.

In its communiqué, the NBU emphasized its tight monetary policy stance as the main underlying reason for easing inflationary pressures and for gradually improving inflation expectations, which were also supported by the strengthening hryvnia. Furthermore, the NBU sees inflation decelerating to 6.3% by the end of this year and confirmed its key monetary policy objective of reducing inflation to the 5.0% plus or minus 2.0 percentage points target range by the end of 2020.

Looking forward, monetary policy easing could well be underway later this year; “the NBU Board said that it could cut [the rate] in the future”, provided inflation expectations continue to improve and the risks to the inflation outlook stemming from uncertainty surrounding the presidential and parliamentary elections retreat.

The next monetary policy meeting is scheduled for 25 April.

Ukraine Interest Rate Forecast

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest