The National Bank of Ukraine (NBU) hiked interest rates by 50bp to 8.5% on September 9 as expected as it continues to battle soaring inflation.
“Tighter monetary policy will help rein in inflation expectations and bring back a steady disinflation trend toward the 5% target, which is projected to be met in 2022,” the NBU said in a statement, as cited by Reuters.
A Reuters poll of analysts this week predicted a rate rise. The NBU crushed inflation in the summer of 2019, which fell to post-Soviet record lows, but in the following two years it has risen again and accelerated in the last six months, driven higher by exploding food prices associated with the coronacrisis.
Inflation topped 10.2% in July, its highest level in the last five years. The NBU has hiked rates three times this year already from 6% at the start of this year, which has also taken the edge off the bounce-back of the economy from last year’s shocks.