Economy 2022-06-15T07:02:47+03:00
Ukrainian news
NBU Raises Discount Rate By 0.5 p.p. To 18.0%

NBU Raises Discount Rate By 0.5 p.p. To 18.0%

NBU, discount rate

The National Bank of Ukraine has raised the discount rate by 0.5 percentage points to 18.0%.

The Ukrainian central bank announced this in a statement, Ukrainian News Agency reports.

The statement reads that in July, inflation continued to decelerate, reaching 8.9% year over year and closely approaching the target range of 6.5% ± 2 percentage points as of the end of Q3 2018. According to the central bank's preliminary estimations, in August, inflation was also close to this level.

The decline in inflation was generally in line with the National Bank's most recent macroeconomic forecast published in July.

A sizable increase in domestic and imported supply of food products, which dampened price growth, contributed to lower inflation. In addition, hryvnia appreciation in the first half-year influenced prices of non-food products.

Core inflation decelerated in July to 8.8% year over year, which also meets the central bank's expectations.

"However, core inflation remaining high indicates that the underlying inflationary pressure is persistently strong. In particular, household income continues to grow rapidly. In July, the average nominal wage was 25% above the last year’s level while the real wage grew by 15%. As a result, production costs keep rising and consumer demand remains robust," reads the statement.

As Ukrainian News Agency earlier reported, since March 4, 2015, the NBU has raised the discount rate from 19.5% to 30%.

Later, the central bank retained the discount rate at the level of 30% several times.

On August 28, 2015, the central bank reduced the discount rate to 27%, and on September 25, 2015 - to 22%.

Since April 22, 2016, the National Bank reduced the discount rate from 22% to 19%, on May 27, 2016 - from 19% to 18%, on June 24 - from 18% to 16.5%.

On July 29, 2016, the National Bank reduced its discount rate from 16.5% to 15.5%, from September 16, 2016 - from 15.5% to 15%.

On October 28, 2016, NBU reduced discount rate from 15% to 14%, and in December 2016 and January 2017 - retained at 14%, in April 2017 - reduced to 13%, in May 2017 - reduced to 12.5% in October - increased to 13.5%, in December 2017 - to 14.5%, in January - to 16%, in March 2018 - to 17%.

In July 2018, the National Bank of Ukraine raised the discount rate by 0.5 percentage points to 17.5%.

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