The National Bank of Ukraine (NBU) as of April 15, 2014, raised the discount rate to 9.5 percent from 6.5 percent per annum, where it has been fixed since August 13, 2013, the NBU said. "Having analyzed the dynamics of the macroeconomic and monetary indicators in January-April 2014, the National Bank's noticed the tense situation on the monetary market of Ukraine, which is the aftereffect of the deterioration of market expectations by economic agents amid the current social and political events," the NBU said in a posting on its Web site.
The NBU notes that the difficult macroeconomic situation, the weakening of the hryvnia and reforms planned by the government pose risks to price stability, namely year-over-year inflation in March increased to 3.4 percent from 1.2 percent in February.
“In order to curb inflation and keep the monetary market balanced, the National Bank’s board believes it necessary to take steps to raise the domestic value of the national currency through the use of interest rate policy levers,” the NBU said.
This step, along with other stabilization measures, will help make bank deposits more attractive and positively influence Ukraine’s forex market, the NBU said.
