Ukraine's central bank cuts policy rate 0.5pp to 15%

By bne IntelliNews September 16, 2016

The National Bank of Ukraine (NBU) cut its policy rate by 0.5pp to 15.0%, the regulator said on September 15 after a meeting of its executive board.

It was the fifth consecutive policy rate cut since April 22, amounting to a 7.0pp total reduction from 22%.

The NBU referred to further reduced inflation risks (August CPI was +8.4% y/y) and the September 14 decision of the International Monetary Fund (IMF) to extend the country a new $1bn loan tranche as key factors enabling it to go forward with monetary easing.

According to regulator, the recent volatility on the foreign currency market will not affect Ukraine’s 2016 inflation rate, which is still expected to be within the target range of 12%, +/- 3pp.

The NBU promised to further cut its policy rate in case risks to price stability continue easing.

“With relatively low inflation so far, and good news from the IMF a day before, some decrease in the policy rate was widely expected,” Alexander Paraschiy, an analyst at the Concorde Capital brokerage in Kyiv, wrote in a research note, adding that the revision of the key rate will have an immediate effect on money markets.

With expected seasonal pressure on the Ukrainian currency, as well as anticipated accelerated inflation due to utility rate hikes in September and October, the NBU will be less likely to further cut the policy rate in October. "In the best case, we expect it might decrease the rate further by 0.5pp next month," Paraschiy added.

Related Articles

EU to fund feasibility study on Slovakia’s proposed Eastring gas link to Balkans

The EU has agreed to help fund a feasibility study on the Eastring pipeline project, which would link Slovakia to the Balkan markets, Slovak transmission system operator Eustream announced on May 26. ... more

Ukraine's central bank cuts key policy rate to 12.5%

The National Bank of Ukraine (NBU) will cut its key policy rate by 0.5 percentage points to 12.5% per annum from May 26. The move is consistent with the pursuit of inflation ... more

Ukraine prosecutors launch anti-graft crackdown on former tax officials

Ukrainian anti-corruption agencies, specifically, military prosecutors and the National Police, have conducted over 400 raids as part of a massive anti-corruption crackdown on former tax ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Dismiss