The National Bank of Ukraine kept its key policy rate unchanged at 17%, saying current monetary conditions are tight enough to bring inflation to the bank's medium-term target.
The central bank said underlying inflationary pressure remained contained, with annual core inflation unchanged at 9.4% in April.
Headline inflation fell to 13.1% year over year in April and is expected to drop in May on lower food prices. It is projected to fall further to 8.9% by the end of 2018 and return to the central bank's target range in mid-2019.
The central bank warned that this forecast depended on Ukraine's ability to sustain structural progress under the International Monetary Fund's Extended Fund Facility.
"[I]f risks to lower inflation and macrofinancial stability rise, including due to a lack of progress in structural reforms and access to official financing, the NBU may hike the key policy rate to the level sufficient to drive inflation back to the established medium-term targets," the central bank's board said in a statement.
