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NBU cuts borrowing costs for third month
Journal Staff Report

KIEV, June 23 - Ukrainian monetary-policy makers have cut borrowing costs for a third month, citing a slowdown in inflation and a rebound of the national currency, and promised more easing to come in order to boost lending.

The National Bank of Ukraine announced on June 23 that it was trimming its benchmark interest rate to 16.5 percent from 18 percent.

"The central bank will continue easing monetary policy to support the economic recovery as long as it doesn't conflict with achieving the inflation target" of 12 percent in 2016, the bank said in a statement.

"Inflation pressure eased because of balanced monetary policy and hryvnia strengthening after a favorable environment on global commodities markets."

The step comes after the bank confirmed that the conflict-wracked country had pulled out of an 18-month recession.

Prime Minister Volodymyr Hroysman, who returned from a trip to Washington earlier this week, said Ukraine will receive a total of $1.7 billion from the International Monetary Fund this year.

Ukraine's currency, the hryvnia, reached its strongest level since January on promises from the new government to resume the IMF borrowing.

The NBU warned in early June that Ukraine risks damaging its reputation and economic stability if it fails to keep up with the IMF bailout program.

The IMF approved a four-year $17.5-billion bailout last year for Ukraine, which is emerging from a political crisis and has been engulfed in a conflict with Russia-backed separatists for more than two years.

The Washington-based organization has been frustrated by the slow passage of reforms in Ukraine. Kiev has so far received $6.7 billion of the IMF's loan package and seen no new disbursements since August 2015.

Hroysman’s cabinet, which took over in April, has pledged to resume cooperation with the IMF to underpin recovery from a recession and boost reserves.

The country’s economy, which declined by 9.9 percent in 2015, is expected to grow 1.5 percent this year, according to Hroysman. (rt/ez)




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Currencies (in hryvnias)
  28.03.2024 prev
USD 39.23 39.14
RUR 0.425 0.422
EUR 42.44 42.44

Stock Market
  27.03.2024 prev
PFTS 507.0 507.0
source: PFTS

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