14:46 03.03.2016

NBU retains refinancing rate at 22% per annum

2 min read
NBU retains refinancing rate at 22% per annum

The board of the National Bank of Ukraine (NBU) at a meeting on Thursday decided to retain refinancing rate at 22% per annum, the central bank said in a press release.

The decision was approved by NBU resolution No. 135 of March 3 on the regulation of the monetary and credit market.

"The retaining of interest rates unchanged aims at achieving the goal to reduce consumer inflation to 12% as of late 2016 and up to 8% as of late 2017," the central bank said.

The regulator said that in January inflation was 0.9% and it was close to the NBU's forecast for this month, and the development of inflation processes was mainly in line with the NBU forecast.

The central bank said that toughening of tension on the currency market that was seen in January and February 2016 did not affect inflation.

"Thanks to the NBU's action aimed at smoothing extra fluctuations of the exchange rate, the hryvnia devaluation was gradual," the regulator said.

The NBU believes that the current forecast for consumer inflation at 12% for late 2016 an 8% for late 2017 is valid.

The low pace of economic growth would help reducing inflation in 2016.

The NBU said that the inflation reduction trend will be also supported by retaining of low global prices of energy and food.

The central bank said that risks for the inflation forecast are external and internal factors that define the state of the balance of payment, the pace of the hryvnia exchange rate and inflation expectations.

The NBU plans to gradually mitigate the monetary policy in the future if inflation risks decrease.

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