The Board of the National Bank decided to reduce the discount rate from 8% to 6% per annum from 12 June 2020.
This was stated by the head of the NBU Jacob Smoliy, — Hvil reports the press service of the Bank.
The regulator said that inflation pressures in April and may was weak due to the noticeable fall in consumer demand for food and commodities.
In addition, inflation has hampered the reduction in price of energy, increasing the supply of vegetables and “freezing” prices for a significant number of services during the quarantine.
“These factors have offset the effects of the March of the weakening of the hryvnia and the still high demand for some products in the first half of April, which are now completely exhausted. In the future, the inflation will grow at a moderate pace, but will probably return to the target range longer than predicted”, — stated in the message NBU.
The main risks to macro-financial stability, according to the NBU, is the duration of a pandemic COVID.
In addition, it is critical to further structural reforms and maintaining sound macroeconomic policy. Anti-crisis measures of the National Bank, introduced in recent months will support business activity in the country, says the regulator.
“According to our estimates, the decline of the Ukrainian economy in Q2 will be greater than expected, although the peak of the crisis has already passed. Therefore, for a speedy return of economy to growth requires decisive steps”, — is written in the message.