The national Bank of Ukraine has decided to keep interest rates from the level of 6.0% per annum from 24 July 2020, according to the website of the Central Bank.
This is the lowest level of interest rates in the history of independent Ukraine.
“The NBU Board decided to leave interest rates unchanged at 6% per annum. On the one hand, it will restrain the growth of prices in conditions of economic recovery in 2021 or 2022, and with another – will leave sufficient space for further reduction in the cost of loans to odnoznachnoi level”, – stated in the message.
According to the report, the Central Bank has revised its forecast of the discount rate in 2020 from 7% to 6% per annum with subsequent increase in 2021 to 6.5%.
It is noted that next year the NBU will make decisions on the discount rate, depending on the implementation proinflationary risks, including to reflect changes in social standards, and the pace of economic recovery.
The regulator said that the previous interest rate reduction is not yet fully reflected in the cost of resources in financial markets.
“Banks continue to reduce interest rates on loans and deposits. However, for fixing rates on odnosnikow level, financial market participants must be assured of a consistent economic policy and a reasonable balance between the containment of inflation and monetary stimulus,” – says the NBU.
According to the report, keeping the discount rate at 6%, the Central Bank leaves sufficient space for monetary stimulus and will be able to give the economy additional impetus for growth in the case of a slow recovery in consumer and investment demand.
Specifies that the next meeting of the Board of the NBU monetary policy will take place on 3 September 2020 in accordance with the approved and published schedule.