The National Bank raised the key interest rate to 15.5% due to increased price pressure
As explained by the NBU, this decision was made in view of the sustained strengthening of fundamental price pressure and the growth of several pro-inflationary risks.
The purpose of raising the rate is to maintain the attractiveness of hryvnia savings, support the stability of the currency market, and control inflation expectations. This should contribute to returning inflation to a slowing trajectory towards the target level of 5%.
The National Bank noted that in recent months, public interest in hryvnia assets has been maintained, in particular due to the timely suspension of the key rate reduction in March and keeping it at 15% over the following months.
Ukrainians continued to increase investments both in term hryvnia deposits and in government domestic loan bonds (GDLBs) denominated in hryvnia.
However, fundamental price pressure has been steadily increasing.
"Although overall inflation slowed to 7.2% in June, core inflation has been steadily rising since the beginning of the year, exceeding the NBU’s forecasts," the regulator stated.
Among additional risks, the National Bank named, in particular, the consequences of the war in the Middle East, which may lead to further increases in business costs.
The NBU emphasized that raising the key interest rate should support the attractiveness of hryvnia instruments for savings, the stability of the currency market, and a gradual reduction in inflation. At the same time, the NBU expects that this step will not have a significant restraining effect on lending, which is currently growing by more than 30% per year.
The National Bank also announced that it is ready to further tighten monetary policy if necessary to contain price pressure.
The current NBU forecast anticipates further increases in the key interest rate and a return to a cycle of monetary policy easing in the second quarter of 2027. At the same time, the regulator stated that it will adjust its decisions depending on inflation dynamics and changes in risk distribution.
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