Ukraine’s central bank has more than doubled its interest rate to 25% to the highest level for any European country, the BBC reports.
The move is intended to slow soaring inflation and prevent a further collapse of its currency amid war.
The World Bank predicts that Ukraine’s economy could shrink by as much as 45% this year.
The rate of inflation – or the cost of living – has risen to 17% in Ukraine and is on track to hit 20% this year, according to the country’s central bank.
The National Bank of Ukraine said the benchmark interest rate increase – from 10% to 25% – would help protect citizens’ savings from being eaten by soaring inflation.
Ukraine’s currency, the hryvnia, has also come under heavy pressure since the start of the conflict in February, falling sharply in value. The central bank said it hoped the rate rise would ease some of that strain and stabilize the currency.
It is Ukraine’s first rate increase since the war broke out, with the bank signaling it would move to reduce rates again once inflation was back under control.