The Board of the National Bank of Ukraine (NBU) has decided to lower the refinancing rate by one percentage notch to 15.5% as of July 29, from 16.5% per annum, which will be a cut for the fourth consecutive month.
The NBU said further liberalization of the monetary policy in Ukraine became possible due to decreasing inflation, which was 6.9% in June year-on-year.
The decision is correlated with the need to achieve inflation targets set at 12% plus or minus 3 percentage notches in 2016 and at 8% plus or minus two percentage notches next year, according to the regulator.
UNIAN memo. The NBU`s highest refinancing rate in independent Ukraine`s history was 30%, between March 4, 2015, and August 28, 2015, after which the central bank reduced it to 27%. On September 25, 2015, it was lowered to 22% and on June 24, 2016, to 16.5% per annum. The NBU has announced further cuts if the market situation is favorable.
Ukraine saw 0.2% deflation in June, in comparison with May, while it slowed to 6.9% year-on-year.
The NBU projects consumer inflation will decline to 12% in 2016.
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