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National Bank raises key policy rate to 17% per annum

High vulnerability of the Ukrainian economy, high inflation expectations of economic agents, the rapid growth in consumer demand are said to be among the main factors for the decision.
22:36, 1 March 2018

National Bank of Ukraine

The National Bank of Ukraine has decided to toughen the country’s monetary policy and raised the refinancing rate to 17% from 16% from 2 March 2018, Interfax-Ukraine reports.

According to a posting on the website of the regulator, resolution #133-rsh on the size of the refinancing rate was approved by the Board on 1 March 2018.

Related: NBU’s decision to sharply boost refinancing rate may slow economic growth – NBU Council head

"Inflation risks, which the National Bank mentioned in January while approving the previous decision on the refinancing rate, are still relevant," the National Bank in a press release posted on its official website.

According to Ukraine’s central bank, the high vulnerability of the Ukrainian economy due to the delay in attracting another tranche under a program of cooperation with the International Monetary Fund, an increase in inflation expectations of economic agents and a significant growth in consumer demand are among those risks.

Related: National Bank raises refinancing rate to 16%

At the same time, the National Bank considers the January forecast to be relevant for reducing inflation to 8.9% in 2018 and its return to the target range in the middle of 2019.

The regulator said that the next decision on the refinancing rate, which will be approved in April 2018, will be made taking into account new macroeconomic forecasts, including that for inflation.

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