NBU cuts refinancing rate to 17%
The National Bank of Ukraine has decided from July to lower the refinancing rate to 17% per annum from the level of 17.5% per annum, at which it had been holding it since the end of April.
"The NBU continues the cycle of monetary policy easing as inflation is declining towards the target of 5%," the central bank said in a statement.
The regulator said this decision also takes into account the updated macroeconomic forecast: the estimate of GDP growth was improved from 2.5% to 3% this year and from 2.9% to 3.2% next year, as well as the balance of risks.
"After temporary factors caused a deviation from the target in previous months, annual consumer price inflation came in at 9% in June 2019, approaching the trajectory of the April forecast. Underlying inflation slowed to 7.4% in Q2, which was close to the NBU's forecast," it said.
"The tight monetary policy remained a strong factor that held back underlying pressures on prices, in particular through strengthening of the exchange rate against currencies of trading partners and lower inflation expectations of households, businesses, banks, and financial analysts. At the same time, inflation remained relatively high due to the pressure from consumer demand, production costs, and rapid growth in administered prices," the NBU said.