One more rate cut: down to 17.0%

UKRAINE - In Brief 18 Jul 2019 by Dmytro Boyarchuk

As expected, the NBU Board approved one more policy rate cut by 0.5 ppt down to 17.0%. The hryvnia's strengthening as well as inflation's easing are behind the decision. The political cycle also appeared to be much smoother than any predicted. The next meeting of the NBU Board will be on September 5, 2019. We expect the NBU to cut the prime rate further by one percentage point. We anticipate prime rate sliding at least down to 16% by the year-end. Remarkably, the NBU promised to publish its prime rate forecasts from this day onwards. For sure, the forecast should not be treated as an obligation of monetary authorities but just as an expert view.

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