NBU mulls further rate cuts following slowdown in inflation

Friday, June 10, 2016 - 13:20 (EEST) Section: Latest news

Deputy Governor of the National Bank of Ukraine (NBU) Dmytro Solohub says the central bank plans to further reduce its refinancing rate in line with the slowdown in headline inflation.
”If it keeps going that way, we will continue to ease our monetary policy,” Solohub said during the presentation of the regulator`s financial stability report, which showed the slowdown in headline inflation as of late May to 7.5% in annual terms.
At this, he noted that the recent decision of the National Energy and Utilities Regulatory Commission to raise heating tariffs for households by almost two times would  likely have impact on the level of inflation.
”The decision [regarding the key policy rate] will be taken by the monetary committee. The meeting will be held in three weeks,” Solohub said adding that the regulator`s decision concerning the refinancing rate will also take into account trends on the currency market.
As UNIAN reported earlier, the NBU on May 27 cut its refinancing rate to 18% per annum from 19% per annum established on April 22, 2016.
On March 4, 2015 the NBU raised its refinancing rate to the historic high level in the Ukrainian banking system: to 30% from 19.5% per annum that was effective previously. On August 28, the NBU cut its refinancing rate to 27%, and on September 25, it was cut to 22% per annum. The regulator said further reduction was possible provided market remained stable.
In May, inflation in Ukraine slowed down to 0.1% compared to the previous month, and to 7.5% in annual terms.
The NBU keeps its headline inflation projection unchanged at 12% by the end of 2016.