Prime rate raised by extra 1 ppt up to 14.5%

UKRAINE - In Brief 14 Dec 2017 by Dmytro Boyarchuk
Today the Central bank one more time increased prime rate by 1 ppt up to 14.5%. Strong inflation is the main reason for this decision. For 11m 2017 CPI grew by 12.5% ytd already beating 12.2% ytd of the Central bank inflation forecast for the total year. At the same time, our CPI projection of +13.3% ytd for 2017 remains valid. Inflation pressure will stay high amid mounting public outlays and depreciating national currency. Since the main part of inflation was driven by food prices we should see elevated inflation tendency at least till the mid of 2018 when new harvest is collected. Against this backdrop we see high risks for further prime rate increase at the next meeting of the Board of the Central bank on January 25, 2018.

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