NBU cuts key policy rate, expecting cooperation with IMF to be successful

The press service of the central bank reported this with a reference to the summary of the key policy rate discussion by the NBU Monetary Policy Committee.

“The current decision to accelerate the key policy rate cuts is based on the key assumption of an updated macroeconomic outlook for successful cooperation with the IMF. The members of the onetary Policy Committee believe that the results of meetings between the Ukrainian government delegation and the IMF leadership in Washington, as well as the announced arrival of the IMF mission in November, give reason to expect that a new memorandum of cooperation will be signed and that Ukraine will have received the first tranche of the new loan by the end of the year,” reads the report.

During the meeting, the participants also discussed the estimated trajectory of the key policy rate. It is noted that most of Committee members agreed that, if events develop under the baseline scenario, the monetary policy easing will continue. They noted that a key policy rate could reach the level of 8% as of the end of 2021, if inflation steadily declines to the 5% target.

As Ukrinform reported, the Board of the National Bank decided to reduce the discount rate from 16.5% to 15.5% per annum from October 25, 2019.