Ukraine’s Central Bank Raises Rates 300 Basis Points to 9.5%

Ukraine’s central bank has hiked its benchmark lending rate for the first time in eight months amid an escalating confrontation with pro-Russian activists.
The central bank raised the discount rate from 6.5% to 9.5% late Monday, a move that should help support the country’s floundering currency and curb inflation.

Ukraine’s currency, the hryvnia, has lost more than a third of its value against the U.S. dollar since Jan. 1, complicating efforts to stabilize the country’s economy.
Exports have declined dramatically as the country’s new government tries to avoid collapse, and foreign exchange reserves are down sharply.
The International Monetary Fund has approved an $18 billion loan for Ukraine, but its not clear the action will calm investors unnerved by a widening conflict between Kiev and Moscow.

Ukraine and Western nations are accusing Russia of deliberately trying to destabilize parts of eastern Ukraine ahead of national elections in late May. Russia’s foreign minister Sergey Lavrov has denied that Russian forces were active in the east.
Protesters forced police officers out of their four-story headquarters in the eastern Ukrainian city of Horlivka on Monday, extending gains made by demonstrators.
Kiev has responded with ultimatums that have demanded the pro-Russian activists give up, but its calls have been ignored.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza