KIEV, June 2 (Reuters) - The recent stability of Ukraine’s national hryvnia currency could allow the central bank to ease monetary policy in the near future, a central bank official said in a statement on Tuesday.
The hryvnia lost 50 percent in value against the dollar in February but has since stabilised after the bank raised interest rates, intervened in the currency market and tightened controls.
The main interest rate has since been kept at 30 percent.
“This is a temporary measure and therefore the fall in risks to hryvnia stability allow one to expect the easing of monetary policy in the near term,” deputy central bank chief Dmitry Sologub was quoted as saying in a statement on the bank’s Facebook page. He did not give further details.
The official hryvnia rate stood at about 21.07 to the dollar on Tuesday, compared with February’s record high of over 30, but still over 20 percent weaker than at the start of the year.
Central bank chief Valeriia Gontareva said other currency controls could also be eased.
“We see that the situation on the currency and deposit markets has stabilised, so we will be coming out with concrete steps to liberalise it,” she was quoted as saying in the statement.
Despite the high interest rate, prices in Ukraine are forecast to rise this year at the fastest rate since 1996 due to hryvnia weakness and a rise in utilities prices under an International Monetary Fund bailout programme.
Ukrainian consumer price inflation was 60.9 percent year-on-year in April and the IMF forecasts end-of-year inflation at 46 percent.
Nevertheless, on Sunday the Fund gave a positive assessment of progress by Kiev on economic reform and said it saw signs emerging that “economic stability is gradually taking hold”. (Reporting by Alessandra Prentice; Editing by Tom Heneghan)