Ukraine sets interest rate at 22% in first wartime cut
2023.07.27 08:14
© Reuters. FILE PHOTO: The headquarters of Ukrainian central bank is seen in central Kiev, Ukraine, March 10, 2016. REUTERS/Valentyn Ogirenko/File Photo
KYIV (Reuters) – Ukraine’s central bank lowered its key interest rate to 22% on Thursday, announcing its first wartime rate cut in a move aimed at helping economic recovery, it said.
The cut from 25% where it was set in June 2022 had been expected by economists and analysts with inflation slowing more quickly than expected this year.
“A fast slowdown in inflation and the stable situation on the foreign exchange market enable the start of a cycle of lowering the discount rate,” the central bank said in a statement.
“At the same time, lowering the discount rate against the background of maintaining macro-financial stability will support the recovery of the economy.”
Central Bank Governor Andriy Pyshnyi said Ukraine’s economy was proving resilient to the new challenges posed by the full-scale invasion launched by Russia in February last year.
That, he said, had prompted the central bank to improve its forecast for gross domestic product growth to 2.9% this year from the previous target of 2%.
The central bank also improved its forecast for inflation to slow to 10.6% this year from its previous forecast of 14.8%.
