National Bank of Ukraine mulls new rate reduction
KYIV. March 12 (Interfax) - The National Bank of Ukraine (NBU) is considering another reduction in its interest rates - the third so far this year, says a report published on the National Bank of Ukraine website and citing the head of the NBU advisors group, Valeriy Livitskiy.
"We believe that we can continue a policy of moderate support for economic activity. There is a high likelihood that we will lower interest rates once more: this issue is under discussion," he said.
Inflation has not exceeded 0.2% for three straight months and from the start of the year it is a record low of 0.4%, he said. "That means that there are not as many situational factors as factors associated with the NBU and government monetary, budget and exchange rate policy," the advisor said.
The start of the year enables the Bank to forecast that inflation will be at the same level or lower this year than in 2011, he said.
The National Bank of Ukraine on January 23, 2012 cut 0.25 percentage points off its working interest rates, which it had kept unchanged since October 8 2010. It lowered them by another 0.25 percentage points in mid-February: interest rates on overnight loans guaranteed by government bonds went down to 8.75% and unsecured loan rates dropped to 10.75%. The discount rate was kept at 7.75%.
Inflation in Ukraine was 4.6% in 2011, compared to 9.1% in 2010.