NBU retains discount rate at 13%

The Board of the National Bank has decided to retain the discount rate at the level of 13%.

This is stated in the message of the NBU, the Ukrainian News agency reports.

Considering that the peak of inflation has not yet passed, and the pro-inflationary risks for the coming months have even increased, the NBU considers it appropriate to remain cautious in the interest rate policy, as well as to take measured measures to ensure the stability of the foreign exchange market.

In order to counter price pressure, the NBU has suspended interest rate easing since July.

This supported interest in hryvnia savings, the rates at which currently provide adequate protection against inflationary depreciation.

In particular, the inflow of time deposits of the population in hryvnias resumed in the fall, and investments in government domestic loan bonds in the national currency continued to increase.

The policy of protecting hryvnia savings from inflation will continue to help limit pressure on the foreign exchange market and preserve international reserves.

Using the regime of managed exchange rate flexibility, the NBU will compensate for the structural currency deficit in the private sector and smooth out excessive exchange rate fluctuations.

The exchange rate will fluctuate moderately in both directions, responding to changes in market conditions, which will continue to strengthen the adaptability of the currency market and the economy.

The dynamics of the exchange rate will be consistent with the NBU's tasks of keeping inflation expectations under control, slowing inflation next year and returning it to the 5% target in the medium term.

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

In July 2023, the NBU reduced the discount 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 - down to 13%.

At that time, the Board of Directors of the Bank of russia on October 25 decided to raise the key rate by 2 percentage points to a record 21.00% per annum.

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