Ukraine Records 7th Month of Deflation

The global deflationary trend described in Conquer the Crash is evident in the eastern European country of Ukraine.

The nation's economy has contracted for the past 7 months.

A June 7 Bloomberg article also reports that "Ukraine's economy shrank 1.3 percent in the first quarter from a year earlier as demand waned for the country's exports such as steel. Consumer prices fell 0.4 percent in May on an annual basis."

In response to Ukraine's deflationary trend, financial authorities cut rates.

The Natsionalnyi Bank Ukrainy in Kiev cut the discount rate to 7 percent, effective June 10, from 7.5 percent yesterday, according to a statement on its website today. That's the first change since March 2012. …

The rate cut will be positively accepted by the market and will boost lending,' Governor Ihor Sorkin said in the statement. 'Together with other measures taken by the central bank and the government, it will promote economic activity in the country and will help the stability of the banking system.'

Neighboring Belarus yesterday cut its benchmark interest rate to 23.5 percent in its fourth reduction this year and Serbia's central bank unexpectedly lowered its benchmark to 11 percent.

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