The National Bank of Ukraine (NBU) has retailed refinancing rate at 14 percent to balance inflation risks and achieve inflation targets in 2017 and 2018, the central bank said in a press release on Jan. 26, referring to the decision of the NBU Board on the size of the refinancing rate.
The NBU also revised upwards inflation forecast for 2017 to 9.1 percent from 8 percent first of all due to growth of minimum wage from Hr 1,600 to Hr 3,200 since early 2017.
This government’s decision would affect inflation via the increase in consumer demand mainly on industrial goods and the increase in cash cost of products. It would indirectly influence inflation expectations of Ukrainians, the regulator said.
The central bank expects that inflation would be within the earlier approved benchmark – 8 percent plus or minus 2 percentage points in 2017 and 6 percent plus or minus 2 percentage points in 2018.
The NBU said that the inflation reduction trend will be seen thanks to restricted monetary and fiscal policy and the large reduction of the pace of growth of administrative tariffs.
