The National Bank of Ukraine left its key policy rate unchanged at 18 percent on January 31st 2018, surprising markets who expected a rate cut by 50bps to 17.5 percent, saying maintenance of monetary policy is needed to bring back inflation to the target of 5 percent in 2020. In 2018, consumer price inflation fell to a five-year low of 9.8 percent from 13.7 percent in 2017 but above central banks’ target range of 6 percent ± 2pp. Policymakers expect inflation to decline gradually to 6.3 percent at year-end 2019 and to 5 percent at the end of 2020. Regarding growth, the economy is seen slowing to 2.5 percent in 2019 from 3.3 percent in 2018, and then accelerating to 2.9 percent in 2020 and 3.7 percent in 2021. Meanwhile, the central bank expects current account deficit to narrow to 3.1% of GDP in 2019 and rising slightly in 2020-2021. Interest Rate in Ukraine averaged 39.02 percent from 1992 until 2019, reaching an all time high of 300 percent in October of 1994 and a record low of 6.50 percent in August of 2013.
Interest Rate in Ukraine is expected to be 17.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Ukraine to stand at 17.00 in 12 months time. In the long-term, the Ukraine Interest Rate is projected to trend around 16.00 percent in 2020, according to our econometric models.