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financing. The DFC also announced a new financing package, which includes more than $300M in political risk insurance for Ukrainian companies operating in the agricultural and manufacturing sectors.
8.2 Central Bank policy rate
Ukrainian bankers predict a further key policy rate decrease to 12%.
Seven members of the Monetary Policy Committee of the National Bank have reported the potential to cut the key rate to 12-12.5% by the end of the year, given that the risks to the inflation forecast are fairly balanced. The NBU itself states that there are reasons to expect the receipt of sufficient amounts of external financing for both this and the next years. However, four committee members believe that the potential for lowering the key rate this year is practically exhausted. In their opinion, the balance of risk for inflation dynamics is slightly shifted upwards, considering the significant budget needs, the expected effects from the weakening of the hryvnia exchange rate, and the likely worsening of expectations due to the acceleration of inflation. On June 13, the NBU lowered the discount rate by 0.5 percentage points to 13% due to the restrained inflation indicators, the long-term improvement in inflationary expectations, and the balance of risk for further inflationary dynamics. Inflation at the end of May amounted to 3.3%. The main risk for this indicator and economic growth remains war.
97 UKRAINE Country Report July 2024 www.intellinews.com