The National Bank of Ukraine has decided to maintain the key interest rate at 15.5% for the third consecutive time. This decision by the regulator is explained by the challenging economic situation in the country, particularly the impact of adverse weather conditions on the harvest, as well as the increased intensity of air attacks from Russia, which negatively affects businesses and intensifies inflationary pressure.
This is reported by Business • Media
Reasons for the Rate Stability and NBU’s Position
The National Bank notes that there are currently no preconditions for lowering interest rates, as the pace of inflation slowdown has been slower than expected, and risks to price stability remain significant. At the same time, the regulator does not see the need to raise the rate — inflation, according to NBU estimates, is under control, allowing rates to be maintained at the current level. Forecasts suggest that the key rate will remain unchanged at least until the fourth quarter of this year.
“is an important prerequisite for a sustainable slowdown in inflation to the target of 5%.”
Assessment of Prospects and Comments from the New Prime Minister
The new Prime Minister of Ukraine, Yulia Svyrydenko, in her first interview after her appointment, expressed hope for a possible easing of monetary policy in the future. According to her, the National Bank will be able to consider the issue of lowering the key rate if inflation decreases to the projected 9.5% by the end of the year. The reduction in the cost of credit resources, in the Prime Minister’s opinion, will contribute to the activation of bank lending, which is an important factor in supporting the Ukrainian economy amid the war.