The National Bank of Ukraine (NBU) has cut its key policy rate to 13 percent to help propel economic growth in Ukraine.
As of last month, the headline inflation rate was 15.1 percent year over year, mainly due to higher production costs, according to a press release on the bank's website. The bank had projected several months ago that inflation would be 16.4 percent.
External pricing for Ukrainian exporters has become favorable this year due to recovering steel, iron ore and grain prices, coupled with record grain and oil yields.
The bank's inflation forecast for this year remains at 9.1 percent and 6 percent for next year. Headline inflation is projected to drop to 5 percent in 2019.
Prices for unprocessed foods are expected to increase quickly, as global food prices are also expected to rise. Increasing investments in agriculture help curb inflating food prices over time.