The National Bank of Ukraine (NBU) from May 27 cuts refinancing rate from 19% to 18%, the central bank's press service has reported.

This is outlined in NBU board decision No. 25-rsh dated May 26, 2016.

The regulator said that the refinancing rate was decreased thanks to the stable slowing inflation trend that meets the inflations targets for 2016 and 2017.

The NBU said that in April 2016 consumer inflation in annual terms decreased to a one-digit level (9.8%) first in the past two years. Month-over-month inflation was higher than in the previous months – 3.5%. This is fist linked to the revoking of the discount on natural gas for households from April 1.

Weak domestic consumer demand, moderate monetary policy and strengthening of the hryvnia exchange rate in the past months contributed to the inflation trend.

The central bank said that in Q1, 2016 real GDP grew by 0.1% in annual terms. This was less than anticipated. The NBU said that consumer demand remains moderate. This was linked to the slow restoration of real wages.

The NBU believes that inflation targets of 12% plus or minus 3 percentage points for late 2016 and 8% plus or minus 2 percentage points for late 2017 are achievable.

The central bank said the key factor for accomplishing price stability is Ukraine's cooperation with the International Monetary Fund (IMF), resoluteness of the government in continuing reforms and their support by the Verkhovna Rada.

If risks for price stability continue descending and inflation slows, the NBU would continue gradually mitigate the monetary policy to support resumption of economic activity in the country.