The National Bank’s board has decided to reduce the discount rate by 0.5 percentage point to 14.5% beginning March 15. In addition, the NBU reported that the rates on three-month deposit certificates and refinancing loans were lowered by 1.5 percentage points to 17.5% and 19.5%, respectively.
“Further slowing of inflation, preservation of a stable situation on the foreign exchange market, and positive developments in the issue of receiving foreign aid provide reasons to resume the cycle of interest rate softening seen earlier”, explained NBU head Andriy Pyshnyy.
He added that inflation slowed down faster than the NBU expected at the beginning of the year, to 4.3% in February. Pyshnyy is convinced that the softening of the interest rate policy will support the economy’s recovery without threatening macro-financial stability.
The head of the NBU predicts that the cycle of softening the interest rate policy will continue, provided that the risks to inflation and exchange rate stability are steadily reduced.