National Bank of Ukraine’s Policy Interest Rate Slashed Another 200 Basis points

June 11, 2020

Ukraine’s central bank rate becomes 6.0%, a record low and down from 12.5% at end-2019 and 18.0% prior to April 2019. Officials also narrowed the overnight rate corridor to 200 basis points in width (5-7%). A released statement concedes that sub-target inflation and the length of time that consumption and business investment seem likely to stay subdued appears longer than presumed in their last formal forecast. Inflation currently is only half the lower limit of the target range. However, note is also made that at 6% the policy rate is now below its estimated neutral level, so the cycle of rapid decline is coming to an end.

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