KIEV, June 13 – The National Bank of Ukraine will probably continue cutting interest rates this year in order to stimulate economic growth, a senior bank official said Thursday.

Valeriy Prokhorenko, the NBU’s deputy governor, said the bank will hold policy meetings every month and each time will be weighing whether to cut the rate.

“The NBU will continue the trend,” Prokhorenko said, according to a report by Ukrayinski Novyny. “We will be stimulating banks to lend more money to the economy.”

The comment comes a week after the NBU has decided to cut the discount rate, the rate at which it lends money to commercial banks, to 7% from 7.5%. The rate cut is in effect from June 10.

The rate cut was the first one in more than a year, underscoring the government’s growing concern over worsening economic performance.

Ukraine’s economy contracted 1.3% in the first quarter from a year earlier, reflecting weakening demand for the country’s exports, mostly steel.

The government originally forecast the economy to grow 3.4% on the year in 2013, but may soon be forced to downgrade the forecast following the poor performance in the first quarter.

Finance Minister Yuriy Kolobov on Thursday that the economy will probably expand 1% to 1.5% on the year in 2013, adding that the economy was likely to improve towards the end of the year.

The International Monetary Fund recently downgraded its forecast for Ukraine to zero growth in 2013, down from 3.5% originally forecast. The IMF sees economic growth at 2.8% on the year in 2014.

The World Bank sees Ukraine’s economy expanding 1% on the year in 2013, but will grow 3% on the year in 2014. (tl/ez)