The National Bank has pledged to maintain strict financial conditions as long as it takes to ensure a stable reduction in inflation at a level of 5%target.
The National Bank of Ukraine in the third time in a row maintains a discount rate at a level of 15.5% per year. It was announced on Thursday, July 24.
“The National Board Board has decided to maintain the accounting rate at 15.5%. It will maintain the stability of the foreign exchange market and the control of inflationaries expectations, to contribute to further weakening price pressure. The NBU will maintain relatively strict financial conditions as needed to ensure a sustainable reduction in inflation in the 5%
The Central Bank noted that inflation is expected to go down, and inflationary expectations will remain controlled.
As for the situation in the foreign exchange market, it is stable, in particular, thanks to the previous steps to the NBU to strengthen the policy of interest. Hryvnia’s vibrations in the US dollar are modest, and euro weakening still has less efficiency, NBU emphasized.
Currently, the regulator does not see the need for further steps to increase the discount rate.
“However, due to slower than expected, reducing inflation and the balance of risks for dynamic prices, the NBU is currently not seeing space for softening policy of interest,” the National Bank added.
Earlier, the NBU increased the discount rate three times in a row. The last increase of this was in March. Prior to this, the National Bank held it for six months to 13%, where it was reduced from 25% from July 2023 to seven stages.
The discount rate is equal to the cost of money to the economy. At this rate, the NBU provides funding to commercial banks, and they, the individual credits and legal creatures. Therefore, the discount rate affects the cost of credit resources. An increase in discount rates indicates an increase in inflation levels and decline in economic growth rate in the country.
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Source: korrespondent
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