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policy rate to 7.5% as a necessary action for curbing inflation and returning it to the 5% target in 1Q22. The key policy rate which exceeds the one in January’s forecast will be a clear signal to the market about the central bank’s intention to see inflation in the target range.
The NBU expects that the higher key policy rate will draw up the interbank interest rates and the interest rates for corporate deposits. The hike of interest rates for deposits of the population is expected by the middle of the year. This will partially redirect consumer demand to banking deposits and thus alleviate its pressure on inflation.
The majority of committee members believe that two recent consecutive hikes of the key policy rate will be sufficient for reaching the consumer inflation target in 1Q22. At the same time, some committee members noted that the inflation pressure might be underestimated due to high uncertainty, and that further hikes of the key policy rate might happen.
8.3 Stock market
8.3.1 Dividends dynamics
Ukraine’s Cabinet of Ministers has followed Russia’s lead and imposed an obligation on the majority of state-owned enterprises (SOEs) to pay out 50% of income as dividends for 2020, the government ordered on April 28.
The cash strapped Ukrainian government is on the hunt for new revenues and hopes to raise more money form its best SOEs. In a controversial move the
53 UKRAINE Country Report XXXX 2018 www.intellinews.com