The financial stress index in Ukraine is high but stable, so the NBU predicts a further decrease in the key rate.

The financial stress index, which measures the level of current threats in the sector, is at a high but stable level, the NBU said, presenting a report on financial stability. The report notes that all-out war and related security threats remain a key systemic risk to the financial sector.

Due to significant military expenditures, the economy will remain dependent on international financial aid, and the risks of its irregularity have increased. However, the chances of successful agreement on financial aid packages by Ukraine’s partners are high, so the NBU predicts the preservation of macroeconomic prerequisites for the stable operation of the financial sector.

Meanwhile, most NBU Monetary Policy Committee members see an opportunity to lower the discount rate by 1-2 percentage points during 2024. At the same time, several committee members believe it is advisable to keep the rate at the current level (15%). However, at the beginning of November, the NBU noted that it would not reduce the discount rate in 2024.