Ukraine to cut its key rate following IMF loan approval next week – Reuters poll

KIEV (Reuters) – An expected new loan from the International Monetary Fund, slow inflation and looming recession likely will prompt Ukraine’s central bank to cut its key rate from the current 8% next week to help the economy recover after the coronavirus lockdown, a Reuters monthly poll showed on Thursday.

“The rate will be reduced since the central bank is now trying to coordinate its policy with the government, and there is a huge demand from the latter as the rate reduction will make loans cheaper in the domestic market,” said Konstantin Fastovets from the brokerage Adamant Capital, who expects a 1 percentage point cut.

He added that the authorities are struggling to underpin the economy, which may shrink by 15% in the second quarter.