NBU raises key policy rate to 6.5%
The National Bank of Ukraine (NBU) from March 5 decided to raise the key policy rate to 6.5% per annum from the 6% level, at which the central bank had kept it since June 12, 2020.
As reported on the central bank's website on Thursday, the NBU took into account the acceleration of inflation in early 2021, although inflation accelerated in early 2021 and, as expected, deviated from the 5% ± 1 pp target range.
The primary assumption of the NBU Board is that Ukraine will continue to cooperate with the IMF.
As before, the imposition of stricter quarantine restrictions in Ukraine and globally to fight the COVID-19 pandemic remains the key risk to macrofinancial stability.
Among other risks, the central bank noted volatile global capital markets a more dramatic deterioration in the terms of trade an escalation of the military conflict in eastern Ukraine or on the country's borders.