NBU raises key policy rate to 16%

NBU Governor Andriy Pyshnyy announced the decision at a briefing on Thursday, according to an Ukrinform correspondent.

"The Board of the National Bank of Ukraine decided to raise the key policy rate to 16% in view of persistent underlying price pressures, second-round effects from supply shocks, and rising medium-term inflationary risks," he said.

According to Pyshnyy, the decision will support the attractiveness of hryvnia-denominated assets and the resilience of the foreign exchange market, helping keep inflation expectations under control and return inflation to a sustained downward path toward the 5% target over the policy horizon.

At the same time, the NBU is ready to respond flexibly to further changes in the balance of risks.

"If risks to price dynamics and inflation expectations increase significantly, the NBU will be ready to take additional measures to contain inflation. However, if a deterioration in the security situation in the coming months leads to a noticeable cooling of consumer demand and the labor market, the NBU will consider easing monetary conditions," the NBU governor said.

As reported, the National Bank of Ukraine raised its key policy rate to 10% in January 2022. In June 2022, the rate had to be raised sharply from 10% to 25%. It remained at that level for more than a year, before being cut to 22% on July 27, 2023, followed by a series of further reductions. Since July 2026, the key policy rate had stood at 15.5%.

Photo: NBU