- Decision
- Maintain
- Rate change
- 0 bps
- key policy rate
- 15.5%
The Board of the National Bank of Ukraine (NBU) kept the key policy rate at 15.5 percent, judging that existing monetary conditions are sufficiently tight to sustain foreign-exchange market stability, anchor expectations and return inflation to its 5 percent target, though it signalled the rate could stay unchanged for longer if disinflation risks rise. After two 100 bp hikes in January and March the rate has been steady since April at 15.5 percent. April inflation accelerated to 15.1 percent year on year and, according to NBU estimates, edged higher in May to a local peak, driven by weather-related food price pressures, strong consumer demand and rising labour costs; the bank still projects a gradual slowdown from the summer, helped by the new harvest, lower global oil prices, easing external price pressures and last year’s high base, with core inflation expected to moderate. Previous tightening has lifted interest on hryvnia deposits, spurring a UAH 19 bn rise in household term deposits and a UAH 11 bn increase in government bond holdings through end-May, cutting households’ net FX demand to about USD 0.2 bn in April–May from USD 1.5 bn in January and supporting currency stability. Official financing of USD 18 bn so far this year has underpinned reserves and budget funding, and continued inflows are anticipated following the IMF programme’s eighth review. The main risks stem from the ongoing war, possible further infrastructure damage, weather-related crop losses and heightened global geopolitical and trade tensions, though larger partner support or faster EU integration could provide upside. The NBU reiterated that it will only consider rate cuts once inflation has clearly peaked and is prepared to tighten policy further if disinflation prospects deteriorate.
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.