The national Bank explained the sharp slowdown in inflation

The slower growth in prices contributed to the strengthening of the hryvnia, the low world energy prices.

The slowdown in inflation in November to 0.1% for the month exceeded the forecast of the National Bank, the press service of the regulator on Friday, December 13.

As noted in the NBU, the growth slowdown contributed to the strengthening of the hryvnia, the low world energy prices, the increased supply of certain foods.

In particular, a stronger exchange rate of the hryvnia has led to a more rapid decline in core inflation, cheaper energy and a number of commodities with a significant share of imports. These factors offset the pressure on inflation from the consumer demand and weak crop of each vegetable.

As a result, inflation became the target range of 5% ± 1.p.p and very close to the medium-term target of 5% set at the end of 2019.

“Given the actual inflation and price trends, according to the expectations of the NBU, inflation at year end will be substantially below forecasts (6.3%) and with high probability will remain within the target range (5% ± 1.p.)”, – stated in the message.

As reported in annual terms in November, inflation amounted to 5.1%.

In response to falling inflation, the NBU reduced the discount rate by 2 percentage points.

While the previous decline in the discount rate was twice lower in October rate reduced by 1% to 15.5%. In previous times, the decline was at the level of 0.5%.

 

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