Trend Change in National Bank of Ukraine’s Policy Rate

October 26, 2017

Ukraine’s main central bank interest rate had been cut from 30% in August 2015 to 12.5% after a final cut made in May of this year, but officials at the latest policy review concluded that deterioration in actual inflation and price expectations now necessitated a full percentage point rate hike to 13.5%. CPI inflation was at 16.4% last month. Accordingly, projected end-year inflation was revised up 3 percentage points to 12.2% for this year and by 1.3 percentage pints to 7.3% for the end of 2018. Officials signaled that further hikes of the policy interest rate will likely occur if inflation fails to settle back in line with the new projected path.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



Comments are closed.