NBU keeps key policy rate at 15.5%

The Board of the National Bank of Ukraine (NBU) has decided to keep the key policy rate at 15.5%.

This is announced in the NBU's statement, the Ukrainian News agency reports.

It is noted that this will support the stability of the foreign exchange market and the controllability of inflation expectations, which will contribute to the further weakening of price pressures.

The NBU will maintain sufficiently tight monetary conditions for as long as necessary to ensure a sustained decline in inflation to the 5% target over the policy horizon.

Inflation peaked as expected in May and returned to decline in June (14.3% y/y).

At the same time, it was higher than forecast, primarily due to the impact of adverse weather conditions on food supply.

In contrast, the slowdown in core inflation (to 12.1%) was somewhat faster than forecast.

Still significant fundamental price pressures reflected the effects of the rapid increase in food prices and significant business spending on raw materials and labor.

The situation in the foreign exchange market was stable, in particular due to the NBU's previous measures to tighten interest rate policy.

Fluctuations in the hryvnia against the US dollar have been moderate, and the weakening against the euro has so far had a minor pro-inflationary effect.

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 it increased to 13.5%, in January 2025 - to 14.5%, in March - to 15.5%.

At the same time, the Board of Directors of the Bank of russia on March 21 decided to maintain the key policy rate at 21.00% per annum.