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Canada’s Fairfax Financial Holdings has bought France’s AXA Insurance
(Kyiv) for $16mn. In Ukraine’s insurance market since 2007, AXA has 780 employees and 1,220 agents in Ukraine. At the end of last year, the company collected $68mn in insurance premiums. Toronto-based Fairfax has $65bn in total assets and an investment portfolio of $39bn.
8.2 Central Bank policy rate
The National Bank of Ukraine (NBU) kept the monetary policy interest rate on hold at 18% at its regular meeting on January 31, after the central bank had hiked the rate three times last year to battle persistent inflation.
Ukraine ended 2018 with inflation of 9.8% after it ticked up again at the end of the year, but the regulator set its target rate for inflation to 5%.
However, the regulator kept its October forecasts for the actual rate of inflation in 2019 to 6.3% from 9.8% in 2018.
"Inflation will continue to slow down gradually. As before, the NBU expects that it will fall to 6.3% by the end of 2019 and by 5.0% by the end of 2020. In addition, as it is planned earlier, by the beginning 2020, inflation will fall within the target range - 5% +/- 1 percentage point (p.p.)," the central bank reported on its website.
The last time the NBU cut rates was in May 2017 and the government was unhappy with the growth-killing hikes last year. But the NBU earned itself some kudos and demonstrated its independence from the government by hiking rates.
Some analysts polled by Reuters had expected a more benign inflation trend to prompt a cut. Inflation dropped into single digits at the end of last year.
The bank “has decided to keep its key policy rate at 18.0% per annum. The rate was maintained at the same level in order to drive inflation down to the target of 5% in 2020,” the NBU said in a statement as cited by Reuters.
The central bank also announced a slight downward revision to its economic growth forecast for 2018 to 3.3% from 3.4% but kept its 2019 forecast unchanged at 2.5%.
It said that uncertainty caused by Ukraine holding elections this year posed a risk to its forecasts. It also said further planned increases in gas prices would impact inflation.
Eight of 15 analysts polled by Reuters had predicted a rate cut, while the other seven believed the central bank would hold fire ahead of a presidential election on March 31.
In related news the finance ministry said it will issue $2bn of Eurobonds in 2018, Deputy Central Bank Chief Dmitry Sologub told a press briefing.
Ukraine’s NBU says room to cut rates if inflation targets are met. There is scope for the National Bank of Ukraine (NBU) to cut monetary policy rates if inflation falls into its target range, Central Bank Governor Yakiv Smolii said at a
51 UKRAINE Country Report March 2019 www.intellinews.com