By KYIV. Sept 14 (Interfax-Ukraine) – From September 15, the National Bank of Ukraine (NBU), after lowering the key policy rate from 22% to 20% per annum, decided to also reduce the rate on overnight certificates of deposit to 16% and on refinancing loans to 22%.
“The interest rate on three-month certificates of deposit will continue to equal the key policy rate,” the central bank said on its website on Thursday.
The controlled easing of interest rate policy will provide additional impetus to the economic recovery, without threatening macrofinancial stability during the implementation of this strategy.
What is more, the NBU will adjust the parameters of the operational design of its monetary policy. More specifically, the NBU decreased, from 70% to 35%, the share of existing household term deposit balances which are used to calculate the limits on the banks’ purchases of three-month certificates of deposit.
As reported, the National Bank announced on March 16 that from April 7 it decided to lower the rate on overnight certificates of deposit from 23% to 20%, but at the same time place certificates of deposit for a period of three months at a key policy rate of 25%, depending on the volume of banks attracting deposits for a period of three months or more months.
On the eve of the debut auction, the NBU set for banks individual initial limits for the purchase of three-month certificates of deposit at the level of 70% of the balances of individuals’ deposits in the national currency held in these financial institutions on April 4 with an initial placement period of 93 days or more. The regulator explained that a second dynamic part is added to the initial limit – the increase in the volume of such a portfolio of hryvnia deposits of individuals for a period of 93 days after April 4, multiplied by the multiplier 3.0.
Banks can submit applications for the purchase of three-month certificates of deposit both from the NBU and on the interbank market within the limits specified above. The National Bank posts them weekly on Fridays.
The NBU also announced in the middle of June that it plans to study the issue of revising the multipliers of three-month certificates of deposit in July, but postponed this issue until September.
At the end of July, the National Bank lowered the key policy rate, and with it the rate of the three-month certificates of deposit from 25% to 22% per annum, while for overnight certificates the rate was reduced from 20% to 18% per annum.
Currently, three-month certificates of deposit are placed for UAH 216.37 billion, while at the debut auction on April 7 they were sold for UAH 51.14 billion.
