The Nationwide Financial institution of Ukraine (NBU) has stored the rate of interest on maintain at 15.5% after elevating the important thing coverage price thrice because the starting of 2025, it introduced on April 17.
This transfer will assist preserve the sustainability of the foreign exchange market, hold inflation expectations below management, and steadily cut back inflation to the 5% goal over the coverage horizon, the NBU mentioned.
"Contemplating the excessive degree of uncertainty, which has solely elevated over the previous months, the NBU will reply flexibly to adjustments within the steadiness of dangers to the worth dynamics and inflation expectations," the assertion learn.
The Ukrainian economic system was closely hit by Russia's full-scale conflict. Initially of the full-scale invasion, inflation skyrocketed to 26.6% in 2022 from 10.0% in 2021. It subsided the next 12 months, however in 2024, inflation once more accelerated to 12%, exceeding the NBU's forecast.
The financial institution mentioned it expects the worth development to begin slowing for a variety of products and providers in the summertime. Inflation is predicted to drop to eight.7% on the finish of 2025 and to succeed in the goal of 5% in 2026, in response to the NBU's forecast.
The continued full-scale conflict stays the principle risk to inflation and financial development, the financial institution mentioned. The NBU lowered its financial development forecast for this 12 months to three.1%, citing "international commerce confrontations."
The NBU raised its key coverage price to 10% in January 2022. It had remained unchanged because the starting of the all-out conflict, however on June 3, 2022, the speed elevated from 10% to 25%. For over a 12 months, it remained on the similar degree, dropping to 22% in July 2023 and following a gradual decline. In December 2024, the NBU raised the important thing coverage price from 13% to 13.5% in response to inflationary developments.
The Kyiv IndependentNina L. Khrushcheva