Ukraine Interest Rate

The National Bank of Ukraine has decided to keep its policy rate at 15.5% to support foreign exchange stability and anchor inflation expectations, aiming to gradually reduce inflation to the 5% target. Inflation peaked in May and began to decline in June, though slightly above forecast due to adverse weather impacting food supply. Core inflation slowed faster than expected. The FX market remained stable, helped by previous rate hikes, while inflation expectations stayed largely controlled despite mixed signals. The NBU now forecasts inflation at 9.7% in 2025, 6.6% in 2026, and reaching 5% in 2027. Economic recovery continues, albeit slowly due to war impacts and poor weather. Real GDP is projected to grow 2.1% in 2025. Sustained external financial aid (USD 54 billion expected in 2025) remains key to macro stability. Risks include prolonged war, insufficient aid, and further damage to infrastructure. The NBU plans to keep tight monetary conditions until inflation sustainably declines.