The FINANCIAL — Ukraine’s central bank will lower its key interest rate by five percentage points to 22% from September 25, the bank said on September 24, citing reduced inflation risks, according to Nasdaq.
The move marks the second successive rate cut, six months after the National Bank of Ukraine raised its key interest rate to 30% as a sharp decline in the value of the national currency caused inflation to skyrocket. Annual inflation has slowed in recent months to just over 50% from a peak of more than 60% in April.
“Our gradual retreat from the policy of ‘expensive money’ has been made possible thanks to a sustainable decrease in the risks to monetary stability in Ukraine,” the National Bank of Ukraine said in a statement.
National Bank chief Valeria Gontareva said at a conference in Odessa that Ukraine expected to gradually lift currency controls in the coming year, but that the measures were unlikely be fully eliminated until mid-2016, Interfax news agency reported.
The central bank also said it now expects the economy to contract by 11.5% this year, compared with its previous forecast of a 9.5% fall, but predicted 2.4% growth in 2016.
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