The press service of the NBU reported this following a meeting of members of the Monetary Policy Committee (MPC) dedicated to the key policy rate discussion.
“The MPC members agreed that the NBU would have to continue to increase its key policy rate in order to decrease underlying inflationary pressures and to balance expectations,” reads the report.
During the meeting, the MPC members paid particular attention to rising inflationary pressures amid the revival of the global and Ukrainian economies. In particular, inflation has accelerated significantly since the year-start.
“In January, as expected, inflation overshot the upper boundary of the target range of 5% ± 1 pp. In February, according to the NBU’s online monitoring data, consumer prices rose at a faster pace than envisaged in the baseline macroeconomic forecast (The January 2021 Inflation Report),” reads the report.
The MPC members stressed that the Ukrainian economy continued to recover. The 2020 GDP fall (by 4.2%) turned out to be less pronounced than expected at the onset of the coronavirus crisis (by 6%). The adverse impact of the stricter quarantine restrictions imposed in January on the economy was only temporary
“Business sentiment improved significantly right after the January lockdown was lifted. In particular, in February industrial companies reported positive expectations of their business performance, for the first time in the last four months. The expectations of the trade and services sectors almost reached the equilibrium level,” reads the report.
As reported by Ukrinform, on March 5, the NBU Board made a decision to raise the discount rate to 6.5% per annum.
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