NBU keeps discount rate at 6%

The National Bank has kept the discount rate unchanged at 6% for the third time in a row, NBU head Kyrylo Shevchenko said at a briefing on October 22. The National Bank also updated the forecast for the discount rate until the end of 2022: the regulator expects an increase to 7.5% in the fourth quarter of 2021, Liga.net reports.

The updated NBU forecast for inflation level at the end of this year is 4.1% (previously 4.7%), at the end of 2021 – 6.5% (it was 5.5%). The forecast for a fall in GDP in 2020 has not changed: minus 6%. In 2021, the NBU is guided by growth of 4.2% (the previous forecast was 4%), in 2021 – 3.8% (it was 4%)

“In 2021, consumer price growth will accelerate to 6.5% under the influence of further economic recovery, the effect of the current weakening of the hryvnia, as well as an increase in the minimum wage, which will push domestic demand. Exceeding the upper limit of the target range will be temporary. The NBU admits a short-term deviation of inflation from the target, so that the economy quickly returns to the path of sustainable growth,” the message says.