The NBU has lowered the key policy rate to 16% per annum.

The Board of the National Bank has decided to reduce the discount rate from 20% to 16% per annum starting October 27. By doing this the National Bank will make it equal to the rate on overnight certificates of deposit. However, the interest rates for NBU operations with banks will remain unchanged. The Central Bank predicted a further decrease in the discount rate because there are no signs of deterioration in the balance of risks and there is successful adaptation of market participants to the new currency regime.

“At the same time, the expected trajectory of inflation and plans for further steps on currency liberalization limit the scope for softening the interest rate policy next year. A return to the cycle of reducing the discount rate in 2024 will be possible only in case of a significant reduction in risks to exchange rate stability and inflation dynamics,” added the NBU.

Thus, the regulator plans to lower the discount rate at the next meeting in December to 15% and will keep it unchanged throughout 2024.