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Ukraine’s National Bank expects reduction of interest rate on foreign currency deposits

Source : 112 Ukraine

The interest rate for hryvnia is forecasted to be below 10%
13:27, 14 February 2020

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In 2020, the National Bank of Ukraine (NBU) expects a reduction of the interest rate on foreign currency deposits of up to 1% and below 10% on the hryvnia. NBU Deputy Chairman Oleh Churii announced this at a meeting with representatives of the European Business Association, Interfax-Ukraine reports.

Such changes are possible in case of approval of a new program with the International Monetary Fund (IMF), and may provoke regular demonstrations under the NBU’s walls.

"Last year, it was a shock because the hryvnia grew. This year, if everything is fine with the IMF, there will be another shock - there will be demonstrations under the National Bank, as people will receive up to 1% on foreign currency deposits and on hryvnia - below 10%," Churii said.

Related: Ukraine's National Bank lowers discount rate from 13.5% to 11%

As we reported earlier, Ukraine's National Bank changed its estimation of the medium-term nominal neutral interest rate in Ukraine from 8% to 7% per annum, Interfax informed about it.

"This was the result of a revaluation of the equilibrium real exchange rate of hryvnia. Today, the structural characteristics of the Ukrainian economy are in line with a stronger equilibrium exchange rate than it was previously expected," the inflation report, which was published on Friday, reads.

Related: Inflation rate in Ukraine reaches 0.2% in January

 

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