Ukraine has sharply raised its benchmark refinancing rate by 10.5 percentage points to 30 per cent, in a desperate move to temper spiralling inflation and halt its sinking currency.
The war in the east of the country has plunged Ukraine into financial crisis, and the central bank’s decision to raise its main interest rate from 19.5 per cent, announced on Tuesday, adds to a flurry of currency and capital controls it has recently imposed amid capital flight. It raised rates from 14 per cent just a month ago.
“Given the situation that the threat of inflation has risen strongly . . . in order to stabilise the situation, the Monetary Policy Committee recommended . . . to raise the rate,” Reuters quoted Ukraine National Bank governor Valeria Gontareva as saying.