NBU raises key policy rate by 1 pp to 15.5%

The Board of the National Bank of Ukraine has decided to raise the key policy rate by 1 pp to 15.5%.

The NBU has said this in a statement, the Ukrainian News agency reports.

Inflation accelerated to 12.9% year-on-year in January.

According to the NBU, it continued to grow in February.

The acceleration of consumer inflation was primarily due to the action of temporary factors.

Such trends were expected and generally corresponded to the NBU forecast (Inflation Report for January 2025).

At the same time, the influence of fundamental inflationary factors increased due to the further reflection in prices of increased costs of enterprises for energy resources and labor, as well as the preservation of fairly brisk consumer demand.

As a result, core inflation accelerated rapidly, ahead of forecast estimates, primarily in the "services" component.

Inflation and exchange rate expectations of economic agents had mixed dynamics, but overall remained relatively stable.

This was facilitated by the NBU's previous measures to maintain the stability of the foreign exchange market and protect hryvnia savings from inflationary depreciation.

They, in particular, affected the reduction in the volume of net purchases of foreign currency by businesses and households in February, as well as the maintenance of demand for hryvnia savings instruments.

Moreover, at the beginning of the year, the population's inflation expectations improved.

At the same time, search query statistics indicate that attention to the topic of inflation remains high.

This, against the background of a potentially prolonged period of high inflation rates, may negatively affect inflation expectations and increase the persistence of price pressure.

As the Ukrainian News agency earlier reported, in March 2021 the NBU raised the key policy rate to 6.5%, in April - to 7%, in July - to 8%, in September - to 8.5%, in December - to 9%, in January 2022 - to 10%, in June 2022 - to 25%.

In July 2023, the NBU reduced the key policy rate from 25% to 22%, in September - to 20%, in October - to 16%, in December - to 15%, in March 2024 - to 14.5%, in April - to 13.5%, in June - to 13%, in December 2024 – to 13.5%, in January 2025 - 13.5%.

At the same time, the Board of Directors of the Bank of russia on February 14 decided to keep the key rate at 21.00% per annum.