KYIV, Sept 20 – Ukraine’s central bank has no plans to cut soon its refinancing rate of 27 percent or obligatory reserve requirement of 15 percent since it fears fanning inflation, a central bank official said on Wednesday.
“It is not a very favorable time to consider these changes and ease monetary and credit policy now,” Natalya Hrebennyk, head of the central bank monetary policy department, told Reuters.
“The market is not giving us the opportunity, yet.”
She said the central bank feared a cut in the rate and reserves, which commercial banks must deposit with the central bank, might fuel consumer inflation.
Consumer price growth accelerated to 18.6 percent in the first eight months compared to an original forecast of 16 percent for the whole year.
The central bank has been gradually cutting the refinancing rate and reserve requirements this year, and President Leonid Kuchma has repeatedly said Ukraine should gradually cut the refinancing rate to 20 percent by the end of the year to make credit accessible to companies.
Currently commercial banks’ rates on loans are around 37 percent annual.
