Ukraine's central bank cuts key interest rate to 22 pct

The National Bank of Ukraine (NBU) decided on Thursday to cut its key interest rate by 5 percentage points to 22 percent, the bank's press service said.

The decision, which takes effect on Sept. 25, was taken due to the reduction of inflation risks and stabilization of the foreign currency exchange market, a statement on the bank's website said.

"A gradual departure from the policy of "expensive money" was made possible due to a steady alleviation of the risks to price stability in Ukraine. In July-August, the deflation was observed, with the core inflation standing close to zero," the statement said.

The bank's move came less than a month after the previous rate reduction on Aug. 28, when the main interest rate was slashed by 3 percentage points to 27 percent in the first cut since August 2013.

In March 2015, the NBU has increased its benchmark interest rate from 19.5 percent to 30 percent -- the highest level in more than a decade, after Ukraine's local currency, the hryvnya, plunged to an all-time low against the U.S. dollar -- 30.01 hryvnya per dollar.

Since then, the Ukrainian currency has strengthened significantly, climbing to about 21.5 hryvnya per dollar. Endit