The Board of the National Bank of Ukraine (NBU) has decided to cut the key policy rate to 16.5%, effective June 24, 2016. Further easing of monetary policy fully complies with inflation target for 2016 and 2017 and takes place under conditions of steady inflationary pressure reduction, improved inflation expectations and stable foreign exchange market situation, according to the official website of the NBU.
In May 2016, headline inflation dropped to 7.5% y-o-y, which was consistent with the NBU`s projections, the report says.
The NBU will proceed with monetary policy easing to support the recovery of economic activity when it is not in conflict with achievement of inflation targets. Gradual and moderate easing of monetary conditions will be an economy incentive and, at the same time, it will secure inflation from domestic demand pressure. Lower interest rates will raise demand for loans.
The decision to cut the key policy rate to 16.5% is approved by NBU Board Decision No. 88-рш, dated June 23, 2016, On Key Policy Rate.
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