Ukraine hikes rate to highest level in decade

July 17, 2014 - 5:41:49 am

KIEV: Ukraine’s central bank said yesterday it will raise its key lending rate by a hefty three percentage points to its highest level in a decade, to rein in soaring inflation.

The surprise decision to raise the main lending rate to 12.5 percent from 9.5 percent effective today comes just weeks after the economy skirted imminent bankruptcy thanks to the promise of immediate international aid.

The National Bank of Ukraine (NBU) has forecast that consumer prices could grow by 17 percent on an annualised basis this year. It noted that the annualised rate had jumped to 12 percent in June from 0.5 percent in January — a month before the ouster of a leader backed by Moscow in Kiev prompted Russia’s seizure of Crimea and encouraged the separatist uprising. AFP