National Bank of Ukraine

January 20, 2022

Officials at the National Bank of Ukraine, who had lifted their policy rate by three full percentage points to 9.0% last year, could not afford to pause rate tightening at this juncture. Instead at today’s first scheduled policy meeting of 2022, the rate was lifted by a fourth full percentage point to 10%, surpassing analyst expectations of a smaller move. Even at 10%, the key interest rate remains 250 basis points below the pre-pandemic level of 12.5%. A statement released by officials laments that total inflation is receding more slowly than hope and revises projected CPI inflation this year sharply higher to 7.7%. That’s also above the medium-term target of 5.0%, which now is unlikely to be reached before 2023. Ukraine faces not only global inflationary risks shared by other countries but also the possibility of a Russian military invasion that could weigh on the hyrvnia.

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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