The NBU keeps prime rate unchanged at 8.5%, new increase likely in December

UKRAINE - In Brief 21 Oct 2021 by Dmytro Boyarchuk

The NBU Board left the prime rate unchanged at 8.5%. The decision went in line with the consensus forecast. At its last communication in September the NBU made it clear that a further prime rate increase is highly undesirable. The market reflected this message at the consensus forecast despite that CPI broke 11% y/y level in September.

The NBU insists the highest CPI was in September and October while consumer inflation surely will ease down to single digits by December. In light of this logic, the NBU anticipates disinflation to start already from November without extra tightening measures. If not, the NBU openly commits to one more prime rate increase, as early as December.

In fact, we agree with the monetary authorities that consumer inflation will be easing over the upcoming months on the back of a high statistical base. However, we see huge risks for inflation to stay elevated beyond 2021. Against this backdrop we see a high probability for the NBU to increase the prime rate by 0.5 ppt to 9.0% at the December meeting of the Monetary committee.

The next meeting of the Board is scheduled for December 9, 2021.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2022 GlobalSource Partners. All rights reserved. This In Brief is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This In Brief is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this In Brief or its contents.