The National Bank of Ukraine (NBU) raised interest rates for the first time in four months. The annual benchmark interest rate increased from 10 percent. up to 25 percent – noted the Bloomberg agency, noting that this is the highest level in Europe. The increase is to curb inflation and protect the Ukrainian currency.
At its meeting on Thursday, the Ukrainian central bank raised its annual reference interest rate from 10 to 25 percent As noted by the Bloomberg agency, this is the highest level since September 2015 and the highest interest rate in Europe.
Ukraine drastically raises interest rates
National Bank Ukraine (NBU) also reported that its interventions to support the hryvnia rose to $ 3.4 billion in May, compared to an average of $ 2 billion in the previous month.
– Development inflation requires the National Bank to return to active interest rate policy in order to prevent further deterioration of inflation expectations and dollarization of the economy, informed the governor of the central bank, Kirill Shevchenko, at a press conference on Thursday.
In April, inflation in Ukraine amounted to 16.4 percent.while core inflation: 13 percent.
The vice-president of the NBU, Serhiy Nikolaychuk, added that the central bank expected a cut in the next step. “This will only happen when we recognize that devaluation and inflation expectations have calmed down,” he said.
The president of the central bank stated that Ukraine should strive to conclude a new agreement with the International Monetary Fund. NBU announced “taking additional measures” to support the interbank market.
As noted by Bloomberg, Ukraine’s deputy head of the central bank, Yuri Heletiy, expects that foreign aid to the country will increase to USD 4.8 billion in June.
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