Such a step will contribute to the further revival of lending, which is important for the recovery of the economy, assured the National Bank.
The National Bank of Ukraine (NBU) reduced the discount rate by 0.5% – up to 13% per annum. This was reported on the regulator’s website on Thursday, June 13.
“Considering the balance of risks, inflation indicators are still restrained and the continued improvement in inflation expectations, the NBU board decided to reduce the discount rate by 0.5 percentage points to 13.0 %,” the statement said.
It is indicated that such a step is consistent with maintaining the protection of hryvnia savings from inflation and will contribute to a further revival of lending, which is important for economic recovery.
The National Bank still expects inflation to accelerate moderately in the coming months and exceed the range of 5% ± 1 percentage point by the end of the year.
It was noted that the main factors for such acceleration were the pressure on business costs during the war, lower yields compared to previous years, the transfer of relatively high wage growth to prices, as well as the increase of electricity tariffs.
Along with the reduction in the discount rate by 0.5%, the rates on three-month certificates of deposit and refinancing loans were also reduced – to 16% and 17%, respectively.
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, and in March it was reduced to 14.5%. At the previous meeting in April, the National Bank suddenly lowered the discount rate to 13.5%.
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.