Ukraine lowers key interest rate to 20%
Ukraine's central bank cut its key interest rate on Thursday to 20 percent to support economic recovery after nearly 19 months of war with Russia, and signalled further reductions were possible.
It was the second consecutive cut in the key rate by the National Bank of Ukraine (NBU), which had lowered the rate to 22 percent from 25 percent on July 27 in the first reduction since Russia's full-scale invasion in February 2022.
"The further pullback in inflation and the NBU's ability to ensure FX market sustainability are making it possible to continue the cycle of key policy rate cuts while maintaining the sufficient attractiveness of hryvnia savings," the central bank said in a statement, referring to the local currency.
"Such a step will support the economic recovery without posing threats to macroeconomic and financial stability," it said.
The central bank said it planned to continue its key policy rate-cutting cycle, but that it would act cautiously given the uncertainty and risks related to the war.
The bank also lowered rates for deposit certificates and on refinancing loans by two percentage points to 16 percent and 22 percent, respectively.
The cut had been expected by bankers and analysts as inflation has been slowing faster than anticipated so far this year. In August, consumer price inflation slowed to 8.6 percent year-on-year.
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