December 23, 2019 / 10:53 AM / 2 months ago

Ukraine central bank says it cut its rate by two percent to help economy

KIEV (Reuters) - Ukraine central bank said on Monday that it sharply cut its key interest rate by 200 basis points in order to underpin economic growth, despite the majority of members of the monetary policy committee supporting a more modest move.

It cut the rate to 13.5% from 15.5% on Dec. 12, effective from Dec.13.

The bank said in a summary of the discussion about the key policy rate that was published on Monday that six members had voted for a 1.5 percentage point cut at the meeting.

The other four suggested that the bigger cut was more suitable due to lower inflationary pressures and the long-term strengthening of the hryvnia.

“The deeper key policy rate cut will also speed up the reduction in the cost of credit resources in the economy and help economic growth,” the central bank said.

The prospect of a new $5.5 billion loan deal from the International Monetary Fund also helped the central bank to take a bolder decision, it said.

Reporting by Natalia Zinets; Editing by Alison Williams

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