The regulator continued the cycle of easing the interest rate policy against the backdrop of slowing inflation and maintaining a stable situation in the foreign exchange market.
The National Bank of Ukraine (NBU) reduced the discount rate by 0.5% – to 14.5% per annum. This was reported on the regulator’s website on Thursday, March 14.
“A further slowdown in inflation, the maintenance of a stable situation in the foreign exchange market, as well as positive developments in matters of receiving external aid make it possible to resume the easing cycle sooner of interest rate policy,” the report said.
In particular, last month, according to the NBU, inflation slowed to 4.3% on an annualized basis. This was facilitated by the larger supply of selected foods and the effects of last year’s significant harvest. Core inflation also slowed to 4.5% on an annual basis.
“The NBU will continue the cycle of easing the interest rate policy, subject to continued reduction in risks for inflation and exchange rate stability,” the regulator said.
The next meeting of the board of the National Bank on monetary policy will take place on April 25.
As you know, in June 2022, the NBU raised the discount rate from 10% to 25%. This level remained until July 2023, when the regulator reduced the rate to 22%. In September, the NBU reduced the rate to 20%, in October – to 16%, and in December – to 15%. In January, the discount rate did not change.
The discount rate is equal to the economic value of money. At this rate, the NBU provides funds to commercial banks, and they lend to individuals and legal entities. Consequently, the discount rate affects the value of credit resources. An increase in the discount rate indicates an increase in the level of inflation and a decrease in the rate of economic growth in the country.
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.