The National Bank of Ukraine (NBU) has decided to leave the benchmark rate unchanged at 15% per annum. This marks the third consecutive time the regulator has maintained current monetary conditions. The official statement was made by NBU Governor Andriy Pyshny during a press conference.
Reasons for Stability and War Risks
The regulator explained its decision by the need to minimize risks associated with geopolitical instability. Specifically, Andriy Pyshny highlighted two key factors: the ongoing war in the Middle East and the deficit of external financing for Ukraine. According to the NBU head, the current rate provides sufficient tightness of conditions for the economy, given the high demand from the population and businesses for hryvnia instruments for savings.
However, calmness in the financial market does not mean the absence of threats. Pyshny warned that the NBU is ready to raise the benchmark rate if necessary to maintain control over inflation expectations. The regulator's goal remains to return inflation to a trajectory of sustainable decline towards the target indicator of 5%.
Inflation Higher Than Forecast
The current economic situation is characterized by contradictory signals. In May, consumer inflation slowed to 8.2% year-on-year, aided by an increase in the supply of raw food products. Nevertheless, core inflation, conversely, accelerated slightly to 7.9%. Both indicators turned out to be higher than expected in the NBU's own forecasts.
Regulator experts expect inflation to remain at a level close to the current one over the coming months, but a pick-up is possible by the end of the year. Significant slowing is forecast only by 2027. The main risks remain linked to Russia's aggression against Ukraine and the situation in the Middle East.
How the Rate Affects Citizens' Wallets
The benchmark rate is a basic tool of monetary policy. It determines the cost of resources that the central bank provides to commercial banks and serves as the main benchmark for rates in the financial market. Simply put, it is this indicator that determines interest rates on bank loans and deposits for ordinary people and businesses.
By manipulating the benchmark rate, the NBU directly influences the pace of inflation, the situation in the currency market, lending volumes, and overall economic activity in the country. The new decision regarding the rate will be reviewed based on the regulator's July macroeconomic forecast.
History of Rate Fluctuations
The path to the current 15% was not easy. At the beginning of the full-scale invasion, the NBU kept the rate at 10%, but by June 2022, it sharply raised it to 25%, where it remained for more than a year. From the second half of 2023, a cycle of policy easing began. Throughout 2024, the rate gradually decreased, but at the end of the year, due to inflationary pressure, the regulator went for an increase again.
In January 2025, the rate was raised to 14.5%, and in March to 15.5%. This level was maintained until the end of the year. In January 2026, a new cycle of easing began, returning the rate to 15%. In March and April, the regulator already left it unchanged, as in the current meeting, which took place after the previous decision on April 30.