Ukraine today raised lending rates as the threat of war with Russia continues to rock its currency and spark the risk of a new rally in inflation, according to Bloomberg.
The country’s central bank raised its key interest rate to 9% from 8.5%, confirming most economists in a Bloomberg poll. This is the fifth increase this year.
The rise in interest rates follows the jump in inflation to double digits, although last month the rise in prices slowed. It also comes as Ukraine’s allies warn of the danger of a Russian invasion, which has led the Ukrainian hryvnia and ruble to record the worst performance in the region over the past month.
The above, combined with the risk of persistently high energy and food prices triggering estimates for even higher inflation, led central bank officials to take action.
“The decision is aimed at offsetting the impact of additional inflationary risks by improving inflation expectations and ensuring that prices fall to the 5% target,” the central bank said in a statement.
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Source From: Capital
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