Page 52 - Eastern Europe Outlook 2020

The NBU slashed its key policy rate by two full percentage points (pp) to 13.5% on December 13 ​from the​ ​previous level of 15.5%​, which followed on from a 150bp cut the month before.
As inflation falls the regulator is able to rapidly ease monetary policy after several difficult years. The policy rate was jacked up to 30% in the worst of the economy collapse in 2015, but the NBU was able to start cutting as that year came to an end and will certainly continue cutting the rate in 2020.
Thanks to the falling inflation rate even after the deep cut in interest rates in the last months of 2019 Ukraine still has amongst the highest real interest rates in the world of 8.4%.
● GIR
Ukraine's international reserves increased by 2.5% m/m to $21.9bn in November following a 0.2% m/m drop in October, according to the NBU.
The result was mainly attributed to "a favourable situation" in the country's foreign exchange market: currency supply in the market remained significantly greater than demand due to substantial sales of foreign currency by exporters, which allowed the NBU to replenish international reserves by $898mn on a net basis.
At the same time, the NBU did not carry out any interventions on the sale of currency in November.
As of early November, Kyiv's international reserves covered 3.4 months of Ukraine’s imports and "were sufficient for Ukraine to meet its obligations and for the government and the NBU to conduct their current transactions", according to the regulator.
52​ EASTERN EUROPE Outlook 2020​ ​ ​www.intellinews.com