The National Bank of Ukraine (NBU) has kept its key police rate at 6%, which is a historic low, for the fifth time in a row.

This was reported in the NBU's materials posted on its website on January 21.

Read alsoCentral Bank warns of acceleration of inflation

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"The Board of the National Bank of Ukraine has decided to keep its key policy rate at 6% per annum. The NBU continues to deliver on its commitment to reach the inflation target. Further on, the central bank will aim its monetary policy at striking the right balance between responding to inflation risks and supporting economic recovery," they say.

The NBU says it is ready to raise the rate in future to bring inflation to the target.

"The NBU takes into account the worsening of inflation expectations that occurred in late 2020, as well as stronger underlying pressures on prices arising from consumer demand. If the impact of these factors continues to increase and is not offset by other factors, such as a large capital inflow, the NBU will raise its key policy rate. This will enable the central bank to curb the rise in inflation in 2021 and bring inflation back to its 5% target in 2022," the NBU said.

Previous developments

  • The National Bank of Ukraine expects inflation to accelerate in the first half of 2021 with a return to a target range of 5% ± 1 pp in the first half of 2022.
  • In December 2020, the regulator kept the rate at 6% for the fourth time in a row.