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Ukraine keeps key interest rate at 25%, expected to remain unchanged through 2024

By Max Hunder

KYIV (Reuters) – The National Bank of Ukraine on Thursday kept key interest rates at 25%, the Levels are expected to hold into the 2024 second quarter as it grapples with high inflation triggered by the Russian invasion.

The central bank, led by new governor Andriy Pyshnyi, said it expects 2022 GDP to contract by 2014% ), That’s a slight improvement from previous forecasts and the economy is “getting alive” after a sharp slump at the start of the war eight months ago.

It indicates that the gradual recovery will continue until 2023-24 and this is a key assumption support It predicts that security risks in Ukraine will decline significantly from the medium term 2023.

The interest rate meeting was the first meeting under the leadership of Pishny, who went from 2014 to 2022 Served as Governor of the National Savings Bank of Ukraine*) and was appointed Governor of the Central Bank on October 7.

His predecessor, Kyrylo Shevchenko, initially resigned, citing health concerns, but later said he was under political pressure after an old corruption case against him Awakened immediately after he left.

Pyshnyi says monetary policy since February 24 invasion ‘completely appropriate’, no despite Russia’s crackdown on Ukrainian energy facilities Air strikes, but the central bank is expected to take additional measures.

He said, however, that the central bank is on standby and ready to step in if necessary.

Inflation will hit 30% this year, but should decline over the next few years as the security situation improves, although it marks High energy costs are the biggest obstacle to any recovery.

Inflation next year should be lower than 21% and lower than % in 2024, it says.

The Central Bank stated that it considers cooperation with Ukraine’s international partners as an important source of funding to supplement the budget.

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