Photo from UNIAN
The National Bank of Ukraine (NBU) has kept its refinancing rate unchanged in order to consolidate positive changes on the money market and rein in inflation.
The decision was taken at an NBU Board meeting on July 30, 2015, which focused on monetary policy issues, according to the posting on the regulator's website.
"The positive developments that we observe prove the efficiency of the NBU stabilizing measures. The money market is currently balanced, and if this equilibrium is maintained – we expect the headline inflation to decelerate further. Should inflationary risks keep decreasing, the National Bank of Ukraine will start easing its monetary policy in the near future," the NBU Governor Valeria Gontareva said commenting on the current situation in the money market.
As UNIAN reported earlier, on March 4, 2015, the NBU refinancing rate was raised from 19.5% to 30% per annum, the maximum level in the history of Ukraine's banking system, with the respective adjustments of rates on bank liquidity support operations and resource mobilization.
The tightening of the NBU monetary policy is aimed at stabilizing the currency market and the official forex rate of the hryvnia whose value against the U.S. dollar halved last year, and it weakened further by 1.8 times this year already, hitting a new historic low of UAH 30.01 per U.S. dollar.
After the increase in the refinancing rate, the introduction of a number of limitations on the currency market and the allocation of the first tranche of the International Monetary Fund under a new four-year Extended Fund Facility program, the hryvnia has strengthened within less than two weeks and its forex rate has been fluctuating in the range of UAH 21-23 per U.S. dollar in the last four months.