The National Bank has cut the key policy rate to 20%.

On September 14, the board of the National Bank decided to reduce the discount rate to 20%, announced the board chairman of the NBU, Andriy Pyshnyy. He noted that the further slowdown of inflation and the NBU’s ability to ensure exchange rate stability make it possible to continue the rate reduction cycle while maintaining the sufficient attractiveness of hryvnia savings.

Thus, annual inflation slowed to 8.6% in August, less than the NBU’s forecast. The NBU expects that the downward trend in inflation will continue, but the potential for its rapid slowdown is almost exhausted.

“The pressure on business expenses will remain significant both due to losses related to the war and due to the increase in the price of electricity and fuel. This factor may restrain the slowdown of inflation,” the bank noted.

Most of the NBU Monetary Policy Committee members expect the discount rate to decrease to 18-19% at the end of 2023.