The National Bank of Ukraine has reduced interest rates on three-month certificates of deposit to 15.5% and on refinancing loans to 16%, limiting the term of their provision to 14 days. This was reported on Thursday by the National Bank, UNN reports.
Details
"The NBU Board has decided to modify the parameters of monetary policy instruments and operations. Thus, starting from September 20, 2024, the interest rates on three-month certificates of deposit will be reduced to 15.5%. The rates on refinancing loans will also be reduced to 16%, and the maximum term of their provision is limited to 14 days," the statement said.
The NBU indicated that overnight deposit certificate rates will remain at the level of the discount rate. However, starting October 11, the NBU is expected to increase the mandatory reserve requirement by 5 pp, except for hryvnia time deposits with a maturity of 93 calendar days or more.
"In addition, starting from the same date, the NBU will increase to 60% the share of mandatory reserves that banks can cover with benchmark OVDP," the regulator added.
According to the NBU, such steps will not pose risks to the stability of the foreign exchange market and the achievement of the inflation target within the policy framework. On the contrary, the combination of these measures is expected to increase banks' flexibility in managing their liquidity and stimulate additional demand for domestic government bonds, which will strengthen the government's ability to raise the necessary financing on the domestic debt market.
Recall
According to the forecast, pressure on prices will continue in the near future, and inflation will grow moderately due to increased aggregate demand, government spending, and higher business costs.