Monetary Policy Tightened Sharply in Ukraine

March 4, 2015

The plunging hryvnia has lifted Ukraine inflation into double digits.  In response, officials at the National Bank of Ukraine had raised their discount rate a month ago from 14.0% to 19.5%, but that didn’t stem geopolitically-generated capital flight.  So even more draconian measures were unveiled in a statement released today.  The discount rate has been increased to 30%.  Reserve requirements on banks are going up, too, and “the MPC has also considered and approved the monetary aggregates targets previously agreed with the IMF under New Extended Fund Facility Arrangement. In particular, the maximum monetary base increase in 2015, aligned with the macroeconomic forecasts, was assessed at the level of UAH 91 billion.” 

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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