Key Policy Rate in Ukraine
The key policy rate ended 2022 at 25%, up from the 9% end-2021 value and higher than the reading of 6.5% a decade earlier. For reference, the average policy rate in Eastern Europe was 8.4% at the end of 2022. For more interest rate information, visit our dedicated page.
Ukraine Interest Rate Chart
Ukraine Interest Rate Data
2018 | 2019 | 2020 | 2021 | 2022 | |
---|---|---|---|---|---|
Key Policy Rate (%, eop) | 18.00 | 13.50 | 6.00 | 9.00 | 25.00 |
National Bank of Ukraine keeps rates unchanged in January
At its 25 January meeting, the National Bank of Ukraine (NBU) held rates stable at 15.00%, as markets had anticipated. The decision followed four consecutive cuts and marked the first hold since the NBU initiated its monetary policy easing cycle in July 2023.
The NBU stood pat to support the hryvnia, keep a lid on price pressures in 2024 and ensure inflation’s return within the 4.0–6.0% target in 2025. The Bank noted that inflation is set to accelerate in the second half of this year due to a low base effect stemming from 2023’s bumper harvest, recovering domestic demand, prolonged security risks and rising wages. Moreover, the risk to stable foreign aid inflows—with more than USD 60 billion in U.S. assistance blocked by political deadlock—further motivated the hold.
In its forward guidance, the Bank stated that upcoming decisions would be based “on inflation dynamics, the state of the FX market, the regularity of international aid inflows, the evolution of security risks, and other factors”. The majority of our panelists now expect further rate cuts through end-2024, while a decreasing number of panelists see the policy rate remaining stable this year. The next monetary policy meeting is scheduled for 14 March.
Andrew Matheny and Johan Allen, analysts at Goldman Sachs, expect more rate cuts in 2024: “We maintain our more benign inflation forecast compared with the NBU and continue to expect that, subject to sufficient international financial support being provided by Ukraine's allies and the successful lifting of further FX restrictions, this would enable the NBU to resume its cutting cycle as early as Q2.” In contrast, EIU analysts see rates remaining unchanged this year: “We do not expect a full return to pre-war monetary policies until 2027 under our current baseline scenario. […] The NBU is likely to keep monetary policy on hold during 2024, assuming that disinflation stalls in the first half of the year. The policy rate is likely to fall gradually from 2025.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Ukrainian interest rate projections for the next ten years from a panel of 16 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Ukrainian interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Ukrainian interest rate projections.
Want to get access to the full dataset of Ukrainian interest rate forecasts? Send an email to info@focus-economics.com.
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