Ukraine keeps policy rate unchanged, raises inflation forecast

Ukraine’s central bank on Thursday kept its main interest rate unchanged at 25%, its highest level in seven years, and raised its inflation forecast for 2022 to over 30%.

Devastated by the war with Russia, Ukraine’s economy fell around 40% year-on-year in the second quarter of this year, the central bank said, opening up the possibility of keeping the key rate at 25% until the second quarter 2024.

“The base case macroeconomic forecast is for the policy rate to be maintained at 25% at least until the second quarter of 2024,” he said.

Ukraine’s economy could contract by a third in 2022 before recovering next year, the central bank said. It is expected to grow between 5% and 6% in 2023 and 2024, he said.

He said Ukraine’s cooperation with international partners would be a key factor in supporting the economy and contributing to its recovery.

A long war with Russia, which invaded on Feb. 24, was the main risk in its forecast, the central bank said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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