May 24, 2018 / 11:52 AM / a year ago

UPDATE 1-Ukraine central bank upbeat on inflation after holding rates

(Adds detail, inflation forecast, background)

By Natalia Zinets

KIEV, May 24 (Reuters) - The Ukrainian central bank left its main interest rate at 17 percent on Thursday, saying it saw signs of some improvement in inflation expectations.

Inflation stood at 13.1 percent year-on-year in April, but the central bank expects it to ease in May, potentially to below 12 percent, partly because food prices have dropped.

“The current monetary conditions are sufficiently tight to bring inflation to its medium-term target,” it said in a statement.

Last month, monetary policymakers said the central bank was unlikely to lower the main rate this year, after it was kept on hold in April following four consecutive increases.

On Thursday, the central bank again stressed the importance of Ukraine implementing reforms required under its $17.5 billion programme from the International Monetary Fund.

It kept its inflation forecast for 2018 unchanged at 8.9 percent, but warned that achieving this target depended on Ukraine cooperating with the IMF.

“These reforms are critical for both maintaining the macrofinancial stability and ensuring the long-term economic growth in Ukraine,” it said. (Writing by Alessandra Prentice; editing by Matthias Williams, Larry King)

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