Ukraine'e central bank raised its key interest rate Thursday for the third time since the beginning of this year in a bid to support local currency, which has sharply weakened in recent months.

The Ukrainian National Bank (NBU) had lifted its benchmark interest rate by 1.5 percentage points to 14 percent after the annual inflation in the East European country reached 19.8 percent in October, the bank said in a statement.

Since January, the hryvnya has depreciated by 58.9 percent against the U.S. dollar over the unstable political and economic situation in Ukraine, the statement said.

On Tuesday, the NBU devalued the official rate of the Ukrainian currency to an all-time low against the dollar -- 15.77 hryvnya per dollar.

The central bank used to support the national currency through market interventions before the crisis, but now, the huge state debt and the weak foreign exchange reserves are limiting the government's ability to sell the foreign currency on the domestic exchange market.

According to the bank's forecast, Ukraine's inflation rate will stand at 19 percent in 2014, compared with 0.5 percent last year.

The NBU has been expected to keep the rate steady after raising it on April 15, when the government began its military operation in the eastern part of the country, and on July 17, when the armed conflict in Donetsk and Lugansk regions sharply escalated. Endi

Go to Forum >>0 Comment(s)