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The National Bank of Ukraine kept its key rate unchanged at 25% on Thursday, a level it said was forecast to be maintained until the second quarter of 2024 as it grapples with high inflation fuelled by Russia's invasion.

The central bank said it expected a 32% GDP contraction this year, a slight improvement in its forecast, and said the economy was "livening up" after falling sharply at the beginning of the war launched by Moscow in Feb. 24.

It said a gradual recovery was set to continue into 2023-24 and that a key assumption of its forecast was that security risks in Ukraine would start to decline significantly from mid-2023.

The rate meeting was the first under the central bank's new governor, Andriy Pyshnyi, who was head of Ukraine's state savings bank from 2014 to 2020 who was appointed head of the central bank on Oct. 7.

His predecessor, Kyrylo Shevchenko, resigned initially citing health problems, but later saying he faced political pressure after an old embezzlement case against him was reawakened immediately after his departure. (Reuters)