Ukraine central bank cuts key interest rate sharply as recession looms – media

15:20, 23 April 2020
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The cut is sharper than the expectations of a Reuters poll of analysts, Reuters said.

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Strict lockdowns on businesses and people will cause the economy to contract by 5% this year, according to the central bank's revised estimate, the first such drop since 2015 and a big swing from an earlier forecast of 3.5% growth.

The looming recession has prompted President Volodymyr Zelensky's government to ask the International Monetary Fund for an $8 billion loan package, which remains conditional on parliament passing a banking reform bill.

The central bank expects a first IMF loan tranche to be disbursed in the second quarter of this year.

As well as wanting to support the economy, the central bank has headroom for rate cuts because hitherto tight monetary policy and low energy prices have brought inflation down to 2.3%, below its target range of around 5%.

At its last monetary policy meeting on March 13, the central bank cut its key rate to 10% from 11%. 

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