Ukraine Central Bank Cuts Interest Rate
August 27 2015 - 9:20AM
Dow Jones News
KIEV, Ukraine—Ukraine's central bank lowered its key interest
rate to 27% from 30%, citing reduced inflation risks.
The National Bank said slowing inflation meant "it is possible
to start a softening of monetary-credit policy," though the bank
added it would have to keep monetary policy relatively tight to
keep inflation slowing.
Ukraine's central bank raised the key interest rate to 30% in
March from 19.5% following a sharp decline in the value of the
national currency, which caused prices to skyrocket. Yearly
inflation peaked in April at more than 60%, though the National
Bank said in June that it expected year-end inflation to be
48%.
The rate cut is "the beginning of gradual monetary policy
normalization after the bank was forced to raise rates aggressively
to stabilize the hryvnia," said Piotr Matys, analyst at
Rabobank.
Earlier Thursday, Ukraine's government said it had reached a
debt-relief deal with private creditors that included a 20%
write-down on the face value of their Ukrainian bonds.
"The good news keeps on coming in Ukraine," said Timothy Ash,
emerging markets analyst at Nomura. The central bank is "obviously
trying to reinforce the local view that this debt deal is good
news."
Write to Chiara Albanese at chiara.albanese@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 27, 2015 09:05 ET (13:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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