Ukraine cuts borrowing rates for 3rd time as CPI fades further

Kiev - Ukraine cut borrowing costs for a third month as inflation continued to ease and the hryvnia reached its strongest level since January.

The central bank lowered its key policy rate to 16.5% from 18%, according to a statement Thursday. Six of 10 economists in a Bloomberg survey predicted a reduction to 17%, while four saw the benchmark being left unchanged.
 
Ukrainian monetary-policy makers are seeking to boost lending as inflation slows from last year’s high of almost 61%. The economy is expanding as it continues to heal following an 18-month recession.

Rocked by political turmoil at the start of 2016, the nation’s currency is rebounding on promises from the new government to resume a $17.5bn bailout.

“The central bank will continue easing monetary policy to support the economic recovery as long as it doesn’t conflict with achieving the inflation target” of 12%, the bank said in its statement.

“Inflation pressure eased because of balanced monetary policy and hryvnia strengthening after a favourable environment on global commodities markets.”

Central bank Governor Valeriya Gontareva told reporters in the capital, Kiev, that she sees the pre-conditions for another rate cut.