The NBU raised the discount rate to 10% per annum
20.01.2022Contrary to market expectations, the National Bank of Ukraine (NBU) raised the discount rate by 100 basis points to 10% per annum from the current 9%, according to the NBU website.
"The Board of the National Bank of Ukraine has decided to raise the discount rate to 10% per annum. The implementation of a significant number of pro-inflation risks requires strengthening the NBU's monetary policy to improve inflation expectations and ensure a steady decline in inflation to 5%," the statement said.
The regulator expects that the discount rate will be at a level not lower than neutral during this and subsequent years.
According to the release, the key risks to the forecast remain Russia's escalation of the military conflict and a longer and more significant than expected price spike in the world.
In addition, pro-inflationary risks are likely to create additional devaluation and price pressures due to deteriorating trade conditions or sharp reductions in yields after last year's records, rising consumer prices due to rising labor costs due to increased labor migration, and rapid changes in administratively regulated tariffs.
Taking into account the existing pro-inflation risks, the National Bank will continue the cycle of strengthening monetary policy and is ready to act in case of further implementation of pro-inflation factors.
Following: interfax.com.ua