Second Rate Reduction in Ukraine

July 18, 2019

The National Bank of Ukraine implemented the second move of an easing cycle, cutting its discount rate to 17.0% from 17.5%. A half percentage point cut had been also done in April. A released statement asserts that inflation of 9% is on track to keep falling toward the 5% target and should reach that goal by end-2020. Also, the current account deficit is expected to stay manageable. The released statement includes forward guidance that envisages the benchmark interest rate dropping progressively to 8% in coming years.

Prior to this year’s pair of rate cuts, there had been extensive tightening to a peak of 18.0% reached in July 2018.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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