Fourth Ukraine Central Bank Interest Rate Cut in Nine Months

May 26, 2016

The National Bank of Ukraine Board announced a one percentage point reduction in its key interest rate to 18%, which was smaller than cuts of 3 percentage points (ppts) in August 2015, 5 ppts in September 2015, and 3 ppts in April 2016.  A statement explaining today’s decision speaks of continuing disinflation due to the continuing tight monetary policy that is dampening consumption, plus recent exchange rate appreciation from a very low historical level.  First-quarter GDP grew more slowly than anticipated, and the statement foretells more easing to come:  “Should risks to price stability abate further, the NBU will move ahead with monetary easing to support the economic recovery.”

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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