KYIV

The National Bank of Ukraine maintained its key interest rate at 7.5 percent after raising it in April and March to curb accelerating inflation.

“The regulator is beginning to gradually curtail anti-crisis monetary instruments, which will strengthen the effect of previous discount rates and help slow inflation,” the central bank said in a statement.

The central bank said it was ready to raise interest rates in future if a more significant increase in fundamental inflationary pressures and deteriorating expectations threatened its inflation target of 5 percent in 2022. Policymakers raised the rate to 6.5 percent in March and to its current level in April, as price growth accelerated sharply.

Annual inflation jumped to 9.5 percent in May, up from 8.4 percent in April and 5 percent in December, pushed up by rising domestic food prices, a widening budget deficit and increasing global food and energy costs.

In April, the central bank revised its inflation forecast up to 8 percent from 7 percent in 2021, taking into account the rapid recovery of the world economy and increasing inflationary pressures. The regulator also predicted that the peak of the inflation surge would take place in the third quarter of this year, forecasting that tighter monetary policy would gradually check inflationary pressures.

As the interest rates on deposits in Ukraine’s commercial banks stopped falling, the National Bank forecasts that more stable deposit rates will encourage people to save again rather than consume, curbing inflationary pressures, First Deputy Governor Kateryna Rozhkova said. She did not rule out a further tightening of the bank’s monetary policy.

“In my opinion, inflationary pressures may be underestimated, as there is a high level of uncertainty. Therefore, I do not rule out the need to continue the cycle of raising the discount rate,” she said.