The National Bank of Ukraine maintained the key policy rate at 15.5%, explaining the need to control the foreign exchange market and inflation, the NBU reported on Thursday, writes UNN.
The Board of the National Bank decided to keep the key policy rate at 15.5%. This will support the stability of the foreign exchange market and the controllability of inflation expectations, which will contribute to a further weakening of price pressure.
The regulator emphasized: "The NBU will maintain sufficiently tight monetary conditions for as long as necessary to ensure a sustainable reduction in inflation to the 5% target within the policy horizon."
Previous NBU measures to tighten monetary policy were effective, the regulator noted.
Interest rates on term hryvnia deposits and government bonds, as indicated, have increased, so "the demand for these instruments has increased, and the net demand of the population for foreign currency has significantly decreased compared to the end of 2024 - beginning of 2025." This, the NBU explained, supported the stability of the foreign exchange market and limited price pressure.
"Given these positive effects, the slowdown in inflation in June, as well as the controllability of inflation expectations, the NBU does not see the need for additional steps to raise the key policy rate," the regulator noted. "However, given the slower-than-expected decline in inflation and the balance of risks to price dynamics (primarily related to the consequences of the war), the NBU currently does not see any room for easing interest rate policy."
The NBU indicated that maintaining the key policy rate at 15.5% is "an important prerequisite for inflation to return to a trajectory of sustainable slowdown."
"At the same time, this decision will have a neutral impact on lending, given the high competition among banks for quality borrowers," the National Bank added.
Lending conditions, as reported, remain close to pre-COVID levels and the most affordable since the start of the full-scale war, and lending dynamics are lively (the growth rates of new net hryvnia loans to businesses in recent months were about 30% year-on-year).
The updated NBU forecast, as indicated, already envisages a longer maintenance of the key policy rate at 15.5% (until Q4 2025) and its slower reduction compared to the April forecast.
"At the same time, the NBU will take into account changes in the balance of risks and will move to a cycle of easing interest rate policy only when it is convinced that there are no threats to a sustainable slowdown in inflation to the 5% target within the policy horizon," the regulator concluded.