The profitability of consumer hryvnia deposits is falling due to a decrease in the discount rate.

Since July 2023, the National Bank of Ukraine has reduced the discount rate twice in a row: from 25% to 22%, and then to 20%. Because of this, rates on hryvnia term deposits of individuals have begun to decrease gradually, the NBU noted. It is said that the hryvnia will continue to be attractive for savings.

Interest rates on hryvnia deposits and government bonds (OVDP) exceed the current and expected levels of inflation. In addition, the average interest rate on hryvnia time deposits is about 14–15% per annum. After taxation,  net return will be about 11-12% per annum, respectively.

“The rates for OVDPs, which the population can purchase, are even higher. For example, annual OVDPs are 18-18.5%. Income from them is not taxable,” the National Bank added.

Note that, according to the NBU’s forecast, the discount rate may drop to 18% by the end of the year.