To curb inflation, the NBU raised its key policy rate to 15.5%.

The Board of the National Bank of Ukraine decided to increase the discount rate by one percentage point to 15.5% per annum and adjust the parameters of its interest rate policy framework. These decisions aim to enhance the appeal of savings in hryvnia, maintain stability in the foreign exchange market, and control inflation expectations. The NBU expressed its readiness to implement additional monetary measures if risks to price dynamics and inflation expectations continue to intensify.

In January, annual inflation rose to 12.9%. December’s inflation rate was 12% (11.2% in November and 9.7% in October). The NBU anticipates inflation will rise in the coming months due to the lingering effects of last year’s poor harvests and increasing production costs for businesses.

However, the NBU’s tighter monetary policy measures will help mitigate fundamental price pressures, and new harvests arriving in the summer are expected to slow the growth of food prices. The NBU projects that inflation will begin to decline in the second half of the year and fall to single-digit levels by year’s end.