The National Bank may start a cycle of key policy rate cuts this autumn
Earlier, the regulator predicted that the key policy rate would remain at 25% until the end of the first quarter of 2024
The National Bank of Ukraine may start cutting the key policy rate earlier than expected in the January macroeconomic forecast – by the end of the first quarter of 2024. This opinion was expressed by 8 out of 11 members of the NBU's Monetary Policy Committee at a meeting on 15 March.
This was reported by the regulator's press service.
"A further, steady and faster-than-forecast slowdown in inflation may be a significant argument," the statement said.
At the same time, two members of the committee noted that the NBU could start a cycle of key policy rate cuts as early as autumn. Another panellist did not rule out that the prerequisites for such a decision could be formed even earlier. He explained: "The pressure on the foreign exchange market is decreasing, and the prospects for maintaining international reserves at a sufficiently high level are improving, given the progress in negotiations with the IMF."
However, most of the panellists agreed that it was necessary to wait for an updated macroeconomic forecast, as there was a "high level of uncertainty related to the course of military events" and the key policy rate trajectory should be consistent with the plan to ease administrative restrictions on the FX market, which the NBU was already working on.
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