Ukraine Interest Rate

The Board of the National Bank of Ukraine decided to maintain its key policy rate at 13% during its September 2024 meeting, keeping borrowing costs unchanged for the second consecutive meeting. Policymakers said the decision will help gradually bring inflation back to the target of 5% in the coming years and support the sustainability of the FX market. Consumer inflation rose to 7.5% year-on-year in August, aligning closely with the NBU's July forecast, while core inflation increased to 6.5% year-on-year, reflecting heightened underlying pressures. Inflation is expected to rise moderately in the coming months due to increased aggregate demand from budgetary spending, higher business expenses for wages and electricity, and increased excise taxes. Nevertheless, the NBU’s cautious monetary policy and reduced external price pressures are expected to contribute to a gradual decline in inflation towards the 5% target in the coming years.