The regulator will make the decision on the discount rate depending on the realization of the inflation risks.
The national Bank will keep interest rates at a record low level of 6.0%. until the end of the year. This was announced by the head of the NBU Kirill Shevchenko at a briefing Thursday, July 23.
“We expect that the discount rate will remain at current low levels until at least the end of this year,” he said.
Shevchenko noted that in 2021, the Bank will make the decision on the discount rate depending on the realization of inflation risks, including changes in social standards and pace of economic recovery.
At the same Deputy head of the NBU Dmitry Sologub noted that NBU rate is below the neutral level.
“We now are in a phase of loose monetary policy,” he said.
Earlier on Thursday it became known that the NBU decided to keep the discount rate at 6.0% per annum. Thus, the rate was at a minimum in the history of Ukraine level.
Discount rate – the equivalent value of money in the economy. At this rate, the Bank provides funds to commercial banks who in turn lend to individuals and legal entities. Thus, the discount rate affects the cost of credit.
The rate increase shows the growth of inflation and falling economic growth in the country.