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The National Bank lowered the key policy rate to 13.5% and improved its inflation forecast.

Ukraine is preparing to turn a state bank into a development bank.

Facade of the National Bank of Ukraine

With the discount rate decrease, the rates on overnight deposit certificates and three-month deposit certificates are also reduced – to 13.5% and 16.5%, respectively.

The National Bank of Ukraine reminds observers that consumer inflation slowed faster than the NBU anticipated in the first quarter of the year. In March, it decreased to 3.2% in annual terms. As before, the NBU still predicts a moderate acceleration of inflation this year; according to the updated and improved forecast, the increase will be 8.2%.

“In March, Ukraine received about $9B from international partners, and in April, the second tranche of €1.5B from the EU has already arrived. In addition, the US has approved a $61B package of military and financial aid. Therefore, Ukraine can count on $38B in foreign budget aid this year,” the NBU is convinced.

In addition, the NBU believes there are prerequisites for further currency liberalization and a discount rate reduction to 13%.

 

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