The National Bank has indicated the presence of prerequisites for further reduction of the key policy rate.

The NBU sees room for further discount rate reduction after its reduction to 13.5% on April 26, 2024. The condition for the next step is the preservation of favorable macro-financial trends. In particular, the economy must further recover, supported by significant adaptability from both consumers and businesses, economy-stimulating fiscal policy and further revival of consumer demand.

Maintaining macro-financial stability will also have a significant impact.

The NBU expects that the relevant changes will support the development of lending and the economy’s recovery and, at the same time, will not create threats to price and financial stability.

The discount rate will remain relatively high so that hryvnia saving instruments (deposits and OVDP) continue to provide value, allowing citizens to protect their savings from inflation.

“This will curb the pressure on the currency market, which is especially important for the further easing of currency restrictions,” the NBU explained.