By KYIV. Dec 7 (Interfax-Ukraine) – The National Bank of Ukraine (NBU) will again keep its key policy rate at 25% at its December 8 meeting, most bankers polled by Interfax-Ukraine on Wednesday predict.
"I am sure that on December 8 the National Bank will decide to keep the rate at the current level of 25%, since there are no grounds for either raising or lowering it. As of the end of October, inflation accelerated slightly, but remains within the forecast trajectory of the NBU. In any case, the level of the key policy rate has no direct influence on inflationary processes now," said Ivan Svitek, the head of the board of Unex Bank.
According to him, mainly the increase in consumer prices is provoked due to logistical restrictions and the destruction of production facilities. Therefore, a further increase in the rate will not be able to significantly affect inflation.
"On the other hand, the NBU is unlikely to lower the rate in the current conditions. The effect of monetary transmission, which the regulator was counting on by raising the rate to the current level, has not yet been exhausted," he added.
Svitek noted that the increase in rates on deposits of individuals continues and somewhat accelerated in December due to the revision of the profitability of deposits by large players, but now it makes no sense to reduce the refinancing rate this month to achieve the goal set by the regulator.
Kostiantyn Khvedchuk, the strategic development analyst at Pivdenny Bank, also predicts that the refinancing rate will remain at 25%.
"As long as inflation continues to approach 30% y/y, and inflation expectations remain high, it is necessary for the NBU to ensure a comparable cost of hryvnia resources in the economy. Therefore, decisions will be made to accelerate the transfer of a preliminary change in the key policy rate to market rates, for example, raising standards of required reserves or the issuance of fixed-term deposit certificates," he said.
His opinion is shared by the head of the analytical department of Sense Bank, Oleksiy Blinov, who also expects the key policy rate to remain at the current level.
Mykola Voitkiv, the director of Accordbank’s risk management department, made the same forecast.
