Interest Rate in Ukraine
Ukraine - Interest Rate
NBU cuts the key policy rate again in December
At its 12 December meeting, the National Bank of Ukraine (NBU) decided to cut the key policy rate to 13.50%, from 15.50%. The decision marked the fifth cut so far this year as the Bank unwinds its tight stance. Market analysts, however, had predicted a smaller 100 basis points chop. Overall, monetary policy still remains contractionary; the NBU ratcheted up the policy rate in 2015 after the political crisis caused the hryvnia to depreciate sharply.
Emboldened by slower-than-expected inflation and a staff-level cooperation agreement with the IMF, the NBU lowered the rate by twice as much as most analysts predicted. A pronounced appreciation of the hryvnia caused inflation to decelerate to 5.1% in November, its lowest point since March 2014, surprising policymakers who had previously expected it to reach the medium-term 5.0% target by the end of 2020. Moreover, the approval of a USD 5.5 billion loan by the IMF on 7 December reassured the Bank of the country’s macrofinancial stability.
Looking ahead, the NBU signaled that it will continue with its easing cycle and confirmed its earlier projection that the key policy rate will fall to 8.00% by the end of 2021. However, the Bank noted that the pace of easing could be quicker than expected if inflation falls more than anticipated and if the IMF-backed structural reforms are implemented swiftly. On the other hand, external risks stemming from new trade restrictions by Russia and turbulence in global financial markets continue to pose risks to the outlook for inflation.
The next monetary policy meeting is scheduled for 30 January 2020.
FocusEconomics panelists expect monetary policy easing to continue ahead and see the key rate ending 2020 at 11.87% and 2021 at 10.60%.
Ukraine - Interest Rate Data
|Policy Interest Rate (%)||6.50||14.00||22.00||14.00||14.50|
5 years of economic forecasts for more than 30 economic indicators.
Ukraine Interest Rate Chart
Source: National Bank of Ukraine.
|Bond Yield||19.00||0.0 %||Jul 27|
|Exchange Rate||23.70||0.30 %||Jan 01|
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January 28, 2020
Industrial production plunged 7.7% over the same month last year in December, marking the worst reading since July 2015.
January 13, 2020
On 7 December, Ukraine and the IMF announced a three-year USD 5.5 billion arrangement under the Extended Fund Facility (EFF), which, if approved by the lender’s Executive Board, would represent the third support package by the Fund since the 2014 recession.
January 9, 2020
Consumer prices decreased 0.2% month-on-month in December, contrasting November’s 0.1% increase.
December 27, 2019
Industrial production plunged 7.5% over the same month last year in November, which marked the worst reading since July 2015.
December 19, 2019
GDP growth moderated to 4.1% year-on-year in the third quarter, according to a second estimate by Ukraine’s Statistical Institute (previously reported: +4.2% year-on-year).