December 8, 2016 / 1:29 PM / 7 months ago

UPDATE 1-Ukraine central bank may resume rate cuts next year

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(Adds quotes, background)

KIEV, Dec 8 (Reuters) - Ukraine's central bank is prepared to resume cutting its main interest rate in 2017 if inflation risks fall, governor Valeriia Gonetareva said on Thursday.

The bank kept the rate on hold at 14 percent on Thursday breaking a run of six consecutive cuts due to an uptick in inflation in October.

The bank said it was "highly likely" inflation would hit its year-end target of 12 percent, but warned of risks to macroeconomic stability including from delayed disbursement of International Monetary Fund loans worth $1.3 billion that were due this year.

"If risks to stability fall, the central bank will resume monetary policy easing next year," Gontareva said in a briefing.

"Unfortunately we won't get the (IMF) tranche this year, but we hope that ... the tranche will get to us in January- February," she said.

The IMF has said further disbursements depend on parliament passing the 2017 budget as well as pension and tax reforms.

The loan delays have prevented the bank achieving its foreign reserve target of $17.5 billion this year, but officials say the currency market will remain stable thanks to foreign exchange inflows from exports following a record harvest in Ukraine, the world's third-largest grain exporter.

"In the coming months we don't expect any significant slowdown in the rate of export revenue inflow," deputy governor Oleh Churiy said at the same briefing. (Reporting by Natalia Zinets; Writing by Alessandra Prentice; Editing by Janet Lawrence)

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