The National Bank Of Ukraine Lowered The Discount Rate From 10% To 8% Per Annum
The Board of the National Bank of Ukraine (NBU) decided to reduce the discount rate from 10% to 8% per annum from April 24. The regulator linked this decision to other measures to support the economy and the population in the context of the coronavirus pandemic.
"This decision was taken in conjunction with other measures to maintain Bank liquidity and the introduction of preferential conditions for borrowers by banks, this will give the economy the incentive necessary to support the population and business in these difficult times and the rapid recovery of business activity after the end of the quarantine," the NBU said in a statement.
The regulator kept the discount rate forecast for the end of 2020 at 7%. The Central Bank will make further decisions on the rate taking into account negotiations with the IMF, the development of the situation with coronavirus and the pace of curtailing quarantine restrictions, as well as taking into account anti-crisis measures of governments and Central banks of other countries.
The NBU does not rule out the possibility of more easing of monetary policy this year if the reduction in consumer demand due to quarantine measures and the weakening of business activity will significantly put pressure on inflation in the direction of its decline than is currently expected.
On January 31, the regulator decided to lower the discount rate from 13.5% to 11% per annum. On March 13, the National Bank lowered the rate to 10% per annum.