National Bank of Ukraine Cuts Key Interest Rate from 11% to 10.0%

March 12, 2020

For the seventh straight scheduled policy meeting, Ukraine’s key central bank policy rate has been cut. This string of reductions began eleven months ago from a high of 18%, and today’s was the second move of 2020 following a reduction of 150 basis points done at the end of January. A statement released by the NBU Board observes little impact thus far from the spreading coronavirus pandemic but acknowledges huge risks associated with that shock. In addition, CPI inflation of 2.4% as of February is still well below the 4-6% medium-term target band. In sizing up the future, officials note

The risk arising from the global spread of the novel coronavirus could, if realized, drive the global economy into a recession and cause a significant slowdown in the Ukrainian economy. A dramatic decline in global demand and investors’ revaluation of risks related to developing economies could negatively affect Ukraine’s external trade and make it more difficult for Ukraine to obtain financing.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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