Piraeus Bank forecasts an increase in the profitability of household and business deposits amid rising key rates in Ukraine.

Igor Yakobchuk, Treasury Director at Piraeus Bank, stated to UBN that competition among banks for client liabilities and the NBU’s increase of the discount rate to 14.5% will result in a gradual rise in deposit rates for both businesses and individuals. However, concerning loan rates, bankers note that there is typically a several-month delay before interest rates are adjusted.

“The increase in the discount rate in December did not have a significant impact on lending. Given the intense competition, it is challenging to predict the extent to which the January increase will influence interest rates at commercial banks,” noted Yana Moroko, Business Lending Division Manager at Piraeus Bank.

Regarding the key rate itself, Yakobchuk emphasized that a decrease should not be anticipated at the upcoming NBU Board meeting on monetary policy.

“A more likely scenario involves maintaining the discount rate or possibly increasing it further if inflation continues to rise. A discount rate that sufficiently covers inflation makes the hryvnia more appealing for savings and eases pressure on the foreign exchange market,” the expert explained.