The National Bank of Ukraine (NBU) has kept the interest rate on hold at 15.5% after raising the key policy rate three times since the beginning of 2025, it announced on April 17.
This move will help maintain the sustainability of the forex market, keep inflation expectations under control, and gradually reduce inflation to the 5% target over the policy horizon, the NBU said.
"Considering the high level of uncertainty, which has only increased over the past months, the NBU will respond flexibly to changes in the balance of risks to the price dynamics and inflation expectations," the statement read.
The Ukrainian economy was heavily hit by Russia's full-scale war. At the start of the full-scale invasion, inflation skyrocketed to 26.6% in 2022 from 10.0% in 2021. It subsided the following year, but in 2024, inflation again accelerated to 12%, exceeding the NBU's forecast.
The bank said it expects the price growth to start slowing for a wide range of goods and services in the summer. Inflation is expected to drop to 8.7% at the end of 2025 and to reach the target of 5% in 2026, according to the NBU's forecast.
The ongoing full-scale war remains the main threat to inflation and economic growth, the bank said. The NBU lowered its economic growth forecast for this year to 3.1%, citing "global trade confrontations."
The NBU raised its key policy rate to 10% in January 2022. It had remained unchanged since the beginning of the all-out war, but on June 3, 2022, the rate increased from 10% to 25%. For over a year, it remained at the same level, dropping to 22% in July 2023 and following a gradual decline. In December 2024, the NBU raised the key policy rate from 13% to 13.5% in response to inflationary developments.
Nina L. Khrushcheva
(Updated: )
