The base scenario of the macroeconomic forecast provides for the maintenance of the discount rate at the current level until the second quarter of 2024.
The National Bank of Ukraine has kept the discount rate at 25% per year and plans to keep it at this level until at least the second quarter of 2024, according to the NBU website.
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“Due to the long period of significant price pressure and the spread of inflationary risks over the forecast horizon, as well as the need to ensure the attractiveness of hryvnia assets and maintain exchange rate stability, The Board of the National Bank decided to keep the discount rate at 25%,” the statement said.
It is indicated that the base scenario of the macroeconomic forecast provides for maintaining the discount rate at 25% at least until the second quarter of 2024.
At the same time, the balance of risks for the discount rate forecast is shifted upwards. If the risks materialize, the National Bank may increase the discount rate and rates in its financial operations above current levels in order to maintain the stability of the monetary sphere and control inflationary processes.
As you know, on June 2, the National Bank of Ukraine raised the discount rate by 1,500 basis points to 25% per annum from the current 10%, which is the highest since 2015. At the same time, the regulator basically said that no more this will increase the discount rate.
The discount rate equals the economic value of money. At this rate, the NBU provides funds to commercial banks, which, in turn, lend to individuals and legal entities. Thus, the discount rate affects the value of credit resources.
An increase in the discount rate indicates an increase in inflation and a fall in economic growth in the country.
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Source: korrespondent
I am Dylan Hudson, a dedicated and experienced journalist in the news industry. I have been working for Buna Times, as an author since 2018. My expertise lies in covering sports sections of the website and providing readers with reliable information on current sporting events.