- Decision
- Raise
- Rate change
- 100 bps
- key policy rate
- 15.5%
The Board of the National Bank of Ukraine (NBU) raised the key policy rate by 100 bp to 15.5 % per annum, citing faster-than-forecast rises in headline inflation to 12.9 % y/y in January and stronger underlying pressures from energy, wages and resilient demand that risk entrenching inflation expectations, while higher rates are expected to safeguard hryvnia savings and FX-market stability and steer inflation back to the 5 % target over the policy horizon. This follows a 100 bp hike to 14.5 % in January 2025. From 7 March the NBU also lifts standing facility rates by 1 pp and, from 4 April, widens the spread between the policy rate and three-month certificates of deposit, raises refinancing rates accordingly and increases banks’ access to three-month CDs through a larger multiplier linked to term-deposit growth, all aimed at boosting hryvnia deposit rates. Inflation is projected to climb further in coming months before resuming a disinflation path in H2 2025 and ending the year in single digits; international financing, including G7 ERA loans and an IMF staff-level agreement, is expected to cover the fiscal deficit and keep reserves and the exchange market stable. The full-scale war remains the dominant risk, with potential shocks from infrastructure damage, labour shortages and global geopolitical fragmentation, though additional external support or faster European integration could improve the outlook. The NBU signals that a rate-cut cycle may start later than envisaged in its January forecast and reiterates its readiness to tighten policy further if inflationary risks intensify.
Rate evolution
Over the period, the National Bank of Ukraine held its key policy rate at 15.5% through 2025, cut it by 50 basis points to 15% in January 2026, paused, and subsequently raised it in two 50-basis-point steps to 16%. Through most of 2025, it kept a tight stance to support FX market sustainability and keep inflation expectations in check as inflation, peaking in May and then slowing, remained above forecast at times and underlying pressures from wages, labor shortages, energy costs, demand and war-related disruption persisted. Late in 2025, the risk balance turned more hawkish, with greater emphasis on energy shortages, larger budgetary needs and uncertainty over external assistance, even as harvests and official financing supported disinflation and reserves.
After the January cut, the NBU held at 15% as inflation rose on energy and fuel prices linked to the war in the Middle East, hryvnia weakness and faster wage growth, before raising it to 15.5% as persistent pressures from logistics, wage and energy costs continued despite increased raw food supply. Most recently, it raised the key policy rate to 16% in view of persistent underlying price pressures, second-round effects from supply shocks and higher medium-term inflation risks, after consumer inflation accelerated to 8.1% year on year in August, primarily on a greater-than-expected rise in fuel prices amid escalation in the Middle East and faster increases in administered tariffs due largely to Russia’s attacks on critical infrastructure. The increase aims to support the attractiveness of hryvnia assets, maintain FX market sustainability, keep inflation expectations in check and return inflation toward the 5% target, while the NBU said it stood ready to tighten further if risks intensified or consider easing if the security situation noticeably weakened consumer demand and the labor market.