REUTERS
The regulator is expected to announce its next decision on the key rate on Thursday, January 30.
The National Bank of Ukraine (NBU) may reduce the key policy rate to 11% per annum in January 2020 and to 8% by the end of 2020, according to experts with Raiffeisen Bank Aval.
"In our opinion, given the prospects for a simultaneous reduction in inflationary pressure on the part of the demand, supply, and 'imported inflation' factors, conditions are being created for further substantial easing and, possibly, a gradual transition to an expansive monetary policy. Accordingly, we expect a significant decrease in the key rates: by 200-250 basis points in January and by as much as 8% by the end of 2020," reads an analytical review by Raiffeisen Bank Aval available to UNIAN.
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At the same time, even with a significant reduction in interest rates and the presence of a liquidity reserve among banks, no intensive growth in corporate lending is expected due to a decline in industrial output and worsening economic activity expectations.
"This will affect both the solvent demand for loans and banks' willingness and ability to provide them. Tangible progress in improving the investment climate due to structural reforms may contribute to corporate lending rise," the bank experts said.
As UNIAN reported earlier, on December 13, 2019, the National Bank continued easing its monetary policy, cutting the key rate by 2 percentage points to a two-year low of 13.5% per annum. At the same time, the regulator reduced the rate for the fourth time in a row, after lowering it in October, September, and July.
In 2019, inflation in Ukraine slowed to 4.1%, a six-year low in annual terms. The regulator is expected to announce its next decision on the key rate on Thursday, January 30, according to the NBU schedule.