The discount rate has been raised to 10%.
Thursday 20 January, the National Bank of Ukraine decided to raise the discount rate by 0.5% to 10%.
This was announced by the head of the NBU Kirill Shevchenko on the briefing.
Why did the discount rate increase?
The NBU explained that the realization of a significant number of pro-inflationary risks requires a tightening of the NBU’s monetary policy to improve inflation expectations and ensure a steady decline in inflation to the 5% target.
At the end of 2021, inflation was declining due to:
- record harvests and correction of some world food prices;
- the effects of the strengthening of the hryvnia in previous months;
- the exhaustion of the low base of comparison and the strengthening of monetary policy.
- li>
Inflation was also held back by administrative decisions to fix tariffs for some housing and communal services (HCS). As a result, consumer price growth slowed down from a peak of 11% in September to 10% in December.
« pressure from other production costs of the business, including labor costs. The influence of strong consumer demand also remained. This, in particular, led to a further increase in core inflation to 7.9% by the end of the year», — explained in the regulator.
Previously about the discount rate:
- December 9 National Bank Ukraine raised the discount rate by 0.5% to 9.0%.
- Seven members of the Monetary Policy Committee spoke out while maintaining the discount rate at 8.5% in October. But three experts spoke in favor of raising the discount rate to 9.0% at the October meeting.