The national Bank again raised interest rates
The national Bank again raised interest rates
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The decision was made amid falling inflation.
The national Bank of Ukraine increased the discount rate to 17.5%. The decision was announced by the head of the NBU Jacob Smoliy.
The reason – “to return inflation to within the target range in 2019”.
However, the reduction of inflation to the target may be under threat. In particular, on the performance of pressure recovery in domestic demand, active labour migration, increasing the risks of receiving the next tranche of the IMF. Also, the NBU is concerned about too high inflation expectations, the declining interest of investors to emerging market assets. “Tighter monetary policy to neutralize their influence and contribute to the reduction of inflation to 5.8% at the end of next year and to 5% in 2020”, – convinced the national Bank.
On 1 March the national Bank announced the rate increase from 16% to 17%. Then this decision was explained as “no significant signs of abating inflation risks, aimed at reducing consumer price inflation to the target level in the medium term”.
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