Ukraine Cuts Key Rate for Fifth Meeting After IMF Loan BoostBy
Benchmark lowered to 15%, in line with survey of economists
Central bank vows to continue policy easing as inflation slows
Ukraine’s central bank cut its key policy rate for a fifth meeting as inflation kept pace with its forecasts and the International Monetary Fund approved a $1 billion aid disbursement.
The National Bank of Ukraine trimmed the rate to 15 percent from 15.5 percent, according to a statement Thursday. Five of nine economists in a Bloomberg survey predicted the move, while four saw the benchmark staying unchanged. Governor Valeriya Gontareva will speak on the decision at 2 p.m. in the capital, Kiev.
“Core inflation will continue to slow, showing an ease in fundamental inflation pressure,” the central bank said. “Should risks continue to ease for price stability, the central bank will further relax monetary policy to support economic recovery.”
The former Soviet republic is mending its economy after a recession triggered by revolution and a separatist conflict. The central bank has been pushing interest rates lower as inflation sparked by a devaluation of the hryvnia eases. The latest infusion of cash from the IMF, a year overdue because of government delays in meeting reform conditions, will unlock further bilateral aid and help stabilize the national currency after a 5.1 percent plunge this quarter.
While consumer-price growth accelerated to 8.4 percent in August as the government raised utility tariffs to bolster state finances, inflation is still within the central bank’s 12 percent goal for this year. The economy will probably expand 1 percent in 2016 after a 10 percent contraction last year, First Deputy Prime Minister Stepan Kubiv said Wednesday.