NBU raises the interest rate to 8.5%.

 As expected, on 9 September the National Bank (NBU) raised the interest rate to 8.5%. The move is aimed at combating soaring inflation and reassuring International donors of the central bank’s independence. Consumer-price growth has exceeded 10% for the first time since 2018, reinforcing expectations of another increase in borrowing costs. At 10.2%, the inflation rate in Ukraine trails only Turkey in the region. The decision comes as IMF officials prepare to review Ukraine’s efforts toward unlocking a $5 billion

Facing stagflation – stagnant growth and 9.5% inflation – analysts are split on whether Ukraine’s central bank will raise its prime rate tomorrow, or keep it at 7.5%

, a Reuters poll indicates. The government had forecast a 4% growth spurt in 2021, but the economy shrank 2% in the first quarter. Seven out of 15 analysts polled by Reuters think high inflation will prompt the National Bank of Ukraine to raise the rate to 8% or 8.5%.