Raising the interest rate is a desperate attempt by the NBU to stop the fall of the hryvnia
London - Kyiv, March 03 (PolitNavigator, Vasily Ablyazimov) - On March 30, the NBU increased the interest rate to an all-time high - XNUMX%. This is a desperate step, the business publication is sure Financial Times.
Subscribe to the news "PolitNavigator - Kyiv" in Facebook, Classmates or In contact with
The publication reports: “Ukraine sharply increased the refinancing interest rate by 10,5 percentage points to 30%. This is a desperate move to curb rising inflation and stop the sinking currency."
The war in the country's east has plunged Ukraine into a financial crisis, and the central bank's decision to raise its key interest rate from 19,5% is an attempt to save a sinking ship.
Capital Economics described the move as "extraordinary" to regain control of a currency that has fallen more than 40% just since the start of this year.
“This is happening against the background of the flight of large capital and the lack of foreign exchange reserves in power,” said the fund’s experts.
The head of the NBU, Valeria Gontareva, said that the step was aimed at providing assistance to the currency in order to return it to the level of 20-22 against the dollar.
The central bank's move comes amid legislative activity by Kyiv lawmakers, who have been trying to pass a package of austerity and legislative reforms needed to receive a new tranche from the IMF. If the IMF board approves the rescue plan, some funds will be supplied to marginally stabilize the financial sector and replenish the central bank's depleted reserves. The NBU reserves are equal to the amount of a month of imports, at the very time when the amount of gold and foreign currency reserves equal to three months of imports is necessary for the stable operation of the economy.
If you find an error, please select a piece of text and press Ctrl + Enter.
Thank you!
Now the editors are aware.