NBU cuts key policy rate to 20%

The National Bank of Ukraine (NBU) has decided to cut its discount rate to 20%.

NBU's Governor Andriy Pyshnyy announced this at a briefing, an Ukrinform correspondent reports.

"The NBU's Board has decided to cut the key policy rate to 20% per annum," he said.

According to him, this step will support economic recovery while not posing a threat to macrofinancial stability. The NBU expects to continue the cycle of key policy rate cuts in the future, which will be consistent with the need to maintain the attractiveness of hryvnia assets as a prerequisite for the stability of the foreign exchange market and a steady decline in inflation.

"At the same time, given the considerable uncertainty and high risks associated with the war, the NBU will act cautiously to continue to ensure macrofinancial stability. If expectations deteriorate, the attractiveness of hryvnia instruments declines significantly, and risks to exchange rate stability increase, the NBU will adjust its decisions and key policy rate forecast accordingly," the NBU Governor emphasized.

As Ukrinform reported, the NBU raised its key policy rate to 10% in January 2022. Since the beginning of the military aggression, the key policy rate remained unchanged. However, on June 3, 2022, the key policy rate was raised from 10% to 25%. The rate remained at this level for more than a year, until it was cut to 22% on July 27, 2023.