What are the NBU’s plans regarding the key policy rate?

Almost all (10 out of 11) of the NBU’s Monetary Policy Committee members support keeping the discount rate at 13%. The NBU notes that the majority believes that the current rate level provides necessary protection for hryvnia savings against inflation, which is a prerequisite for the currency market’s stability. This, in turn, will help keep inflation moderate this year, turn downward next year, and further slow to the 5% target.

One Committee member proposed raising the discount rate to 13.5%. In their opinion, due to increased inflationary pressure and the expected expansion of budgetary incentives, the NBU should act more decisively to form appropriate rigidity in monetary conditions. A moderate rate increase would not only increase the attractiveness of hryvnia savings but would also be a clear signal to financial markets of the NBU’s goals in the face of increased inflationary pressure.

The head of the NBU, on the contrary, does not oppose the resumption of the key rate reduction cycle after receiving funds from frozen Russian assets.