NBU reduces discount rate from 25% to 22%

The National Bank of Ukraine (NBU) reduced the discount rate from 25% to 22% from July 28, 2023.

The NBU has said this in a statement, Ukrainian News Agency reports.

A rapid slowdown in inflation and a stable situation on the foreign exchange market enable the start of a cycle of lowering the discount rate.

Taking into account the improvement in inflation expectations and the forecast of a further slowdown in inflation, the current and projected rate reduction is consistent with the preservation of the attractiveness of hryvnia savings.

This is an important element of ensuring exchange rate stability by easing currency restrictions and transitioning to greater exchange rate flexibility.

At the same time, the reduction of the discount rate against the background of maintaining macro-financial stability will support the recovery of the economy.

The discount rate will continue to decrease, provided that the currency market remains stable and inflation slows down over the forecast horizon.

The NBU will take into account the need to maintain the high attractiveness of hryvnia assets at the stage of easing currency restrictions and transitioning to a more flexible exchange rate.

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%, in July - to 8%, in September - to 8.5%, in December - to 9%, in January 2022 - by 1 p.p. to 10%, in June 2022 - by 15 p.p. to 25%.

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