REUTERS
The National Bank of Ukraine (NBU) has decided to dramatically cut its refinancing rate from 27% to 22% per annum, effective from September 25, 2015, according to a posting on the regulator's website.
The NBU's Board passed resolution No. 627, dated September 24, 2015, on the money market regulation to this effect.
The NBU moves ahead with plans to ease the monetary policy stance, which was launched last month. A gradual departure from the policy of 'expensive money' was made possible due to a steady alleviation of risks to price stability in Ukraine, according to the report.
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 was 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 strengthened within less than two weeks and its forex rate has been fluctuating in the range of UAH 21-23 per U.S. dollar up to this day.
On August 28, 2015, the refinancing rate was cut to 27%.