National Bank of Ukraine

December 15, 2017

Ukraine’s central bank interest rate was raised by another full percentage point to 14.5% just seven weeks after an initial increase of 100 basis points. As in Mexico, inflation has been higher than assumed previously, and a number of price risks continue such as rising food prices, more fiscal deficit spending, some wage pressure, higher fuel costs and hyrvnia softness. Total CPI inflation of 13% is well into double digits, and core inflation has climbed above 8.5%. NBU officials may not be done. According to a statement released today, “If fundamental inflation risks increase further, the NBU may resort to further key rate hikes to bring inflation back to the target range. The next key rate decision, which will be taken in January 2018, will factor in new macroeconomic projections, inflation projections in particular.”

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



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