The NBU will resume reductions in the key policy rate in the second half of the year.

Members of the Monetary Policy Committee of the National Bank are considering the possibility of easing the interest rate policy in the second half of 2025. However, given the balance of risks, they are inclined to take more cautious steps than previously expected, according to the results of a discussion among the committee members. Experts anticipate the resumption of a cycle of reducing the NBU discount rate after the price surge ends and the risk of high inflation diminishes.

However, most Committee members do not rule out that, given current inflationary trends and increased risks – primarily from the war’s consequences and adverse weather impacting crops – the reduction of the discount rate may be postponed.

Moreover, if the risks to a stable return of inflation to the target level of 5% increase, the NBU should be prepared to further tighten monetary policy. However, analysts believe that the discount rate’s current level is sufficient to counteract price pressure and currently do not see the need for a tightening of interest rate policy.