KIEV: Ukraine’s currency steadied yesterday from its heavy falls after the crisis-hit country’s central bank unexpectedly raised its key interest rate by 46 percent to boost consumer confidence and stop spiralling inflation.
The local currency clawed back 60 kopeks to trade at 11.9 hryvnias to the dollar on the main interbank exchange. The strong move came in response to the National Bank of Ukraine’s announcement on Monday that it was raising its main interest rate to 9.5 from 6.5 percent.
The bank also upped the overnight rate at which it provides emergency funding to other lenders by 700 basis points to 14.5 percent. It cited “the tense situation on the monetary market, which reflects worsening market expectations.”
The bank said the inflation rate had accelerated to 3.4 percent in March from 1.2 percent in February. The hryvnia has recorded one of the worst performances among any emerging market by losing about 35 percent of its value against the dollar since the start of the year. AFP
