Economy 2023-10-15T06:04:25+03:00
Ukrainian news
NBU Raises Discount Rate From 7.5% To 8%

NBU Raises Discount Rate From 7.5% To 8%

discount rate, National Bank of Ukraine, inflation, inflationary pressure, consumer inflation, inflation forecast

The National Bank of Ukraine (NBU) has raised the discount rate from 7.5% to 8%.

The NBU has said this in a statement following a meeting of the Monetary Committee, Ukrainian News Agency reports.

It is noted that in the face of a significant increase in fundamental inflationary pressure, this is necessary to return inflation to the 5% target in 2022 and keep inflationary expectations under control.

In the first half of 2021, inflation as expected went beyond the target range of 5% ± 1 p.p., but the deviation was larger than expected due to the influence of both temporary and fundamental factors.

In June 2021, consumer inflation on an annualized basis remained at the level of the previous month (9.5%), but was higher than the April forecast of the National Bank (9.2%).

The intensification of inflationary pressures, in particular fundamental ones, is also influenced by the dynamic renewal of the economy, as evidenced by monthly and other high-frequency indicators.

Thus, in April, the index of production of basic industries increased by 18.3% year over year, in May - by 4.1% year over year, and the business activity expectations index in June reached its highest value since October 2019.

At the same time, the favorable situation on the foreign exchange market and the stabilization of inflationary expectations restrained the fundamental inflationary pressure to a certain extent.

As Ukrainian News Agency earlier reported, on October 28, 2016, the NBU reduced the discount rate from 15% to 14%, and in December 2016 and January 2017 it kept it at the level of 14%, in April 2017 it reduced it to 13%, in May 2017 it reduced it 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 - to 17.5%, in September 2018 - to 18%, in April 2019 - reduced to 17.5%, in July 2019 - to 17%, in September 2019 - to 16.5%, in October 2019 - to 15.5%, in December 2019 - to 13.5%, in January 2020 - to 11%, in March - to 10%, in April - to 8%, in June - to 6%, in March 2021 - increased to 6.5%, in April 2021 - to 7.5%.