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worth more than $2.5bn. The court also established a weekly limit of £20,000 on Kolomoisky’s personal expenses.
The Kyiv Administrative Court ruled on April 18 to cancel a December 2016 resolution of Ukraine’s central bank (NBU) determining a list of related parties of Privatbank, the NBU reported on April 19. That resolution listed the legal entities that fell under the bank's bail-in procedure –, which involved wirting down of $1.1bn of the bank’s liabilities (including $550mn in Eurobonds). The bail in followed recognition of Privatbank insolvent and preceded its nationalization in December 2016. The court ruling was based on a claim filed by its former key shareholder, Igor Kolomoisky, and his related entity, Triantal Investments Ltd. The decision grants former Privatbank shareholders the ability to reclaim their funds that were bailed in during the nationalization, the NBU stated, stressing that it was a first-tier court ruling and therefore doesn't take immediate effect. The NBU has promised to appeal the ruling. Recall, the same court reported in its April 18 press release that it ruled to cancel the sales-purchase agreement based on, which Privatbank was nationalized in 2018. This court ruling has a direct effect on Privatbank Eurobonds. So far, we do not see strong chances for the ruling to be affirmed by an appellate court. In any case, the likelihood is now higher of canceling the bail-in of the bonds, either by local or international courts.
8.2 Central Bank policy rate
The National Bank of Ukraine (NBU) cut the monetary policy rate to 17.5%
from 18% from April 26, 2019, NBU Governor Yakiv Smolii said at a briefing.
"The board of the National Bank decided to lower the refinancing rate to 17.5% per annum from April 26. Currently, a steady downward trend in inflation towards the 5% target allows the National Bank to begin the cycle of reducing the refinancing rate," he said.
This was the first rate cut since July 2018 when the NBU increased rates to head off rising inflation.
NBU has shown its independence from the government by raising rates in the run up to Ukraine’s presidential election in April, despite the negative impact rate hikes have on growth.
Inflation rose in the second half of 2018 to peak at 10% in November, but inflation has passed peak and has fallen steadily to finished March at 8.6% in March.
The NBU expects that inflation in Ukraine will drop to 7% by the end of 2019 and 6.7% by the end of 2020, but will remain above the NBU target.
Morgan Stanley experts believe that in combination with tighter financial conditions, this will mean that real rates will remain high, while the refinancing rate will decrease only to 16% by the end of 2019 and 14% by the end of 2020. The NBU also updated its macro out look. Real GDP growth in Ukraine in 2019 will slow to 2.5%, and in 2020-2021 will accelerate to 2.9% and 3.7% respectively.
According to its data, the estimate of inflation for this period also remained
51 UKRAINE Country Report May 2019 www.intellinews.com