NBU drops its discount rate to 10.25%

The National Bank of Ukraine’s board yesterday approved lowering the discount rate from 11.00% to 10.25% in response to the decline in inflation in July. The rate change will come into effect tomorrow. The NBU last moved the rate on June 15, when it cut it from 12.00% to 11.00%, prior to that the rate had been unchanged since April 2008. Andrii Parkhomenko: In Ukraine, the discount rate has little impact on the broader economy, unlike interbank rates that are virtually unconnected to the central bank’s discount rate. The decrease in the rate should lower the NBU’s refinancing rate, however refinancing is hardly available to most commercial banks now.