KIEV, Aug 11 (Reuters) - Ukraine's central bank said on Tuesday it would cut its key interest rate to 10.25 percent as of Aug. 12 from 11 percent now.
The bank said in a statement it was cutting the rate to "strengthen the positive trends on the money and credit markets and create a stimulus to improve the situation in the real economy".
A central bank source told Reuters earlier on Tuesday that the central bank was poised to make a rate cut of that size.
It last cut rates in June by 1 point, citing similar reasons. The economy is expected to shrink by 13-14 percent this year but has seen small signs of improvement recently such as monthly rises in industrial production. [ID:nLB15168] Inflation slowed in July to 15.5 percent from 26.8 percent in the same month a year ago. Month-on-month prices fell 0.1 percent against a rise of 1.1 percent in June and the government said the trend could continue into August. [ID:nLA302250] (Reporting by Yuri Kulikov, editing by Mike Peacock)