Ukraine Raises Interest Rate to 16.5%

2026-10-29 12:06 By Agna Gabriel 1 min. read

The National Bank of Ukraine raised its key discount rate to 16.5% in response to mounting inflationary pressures and deteriorating inflation expectations.

The move aims to support the attractiveness of hryvnia-denominated assets, stabilize the foreign exchange market and contain price growth.

Inflation has accelerated amid rising fuel costs and disruptions to businesses and logistics caused by Russian attacks.

In September, annual headline inflation reached 10%, while core inflation rose to 8.8%, with pressure continuing into October.

The NBU has consequently raised its 2026 inflation forecast to 12.5%, but expects inflation to ease to 7.3% in 2027 as fuel-related effects fade and tighter monetary policy takes hold.

The 5% inflation target is now expected to be reached in 2028.

Meanwhile, damage from the war continues to constrain economic activity, making international financial assistance essential for macroeconomic stability.



News Stream
Ukraine Raises Interest Rate to 16.5%
The National Bank of Ukraine raised its key discount rate to 16.5% in response to mounting inflationary pressures and deteriorating inflation expectations. The move aims to support the attractiveness of hryvnia-denominated assets, stabilize the foreign exchange market and contain price growth. Inflation has accelerated amid rising fuel costs and disruptions to businesses and logistics caused by Russian attacks. In September, annual headline inflation reached 10%, while core inflation rose to 8.8%, with pressure continuing into October. The NBU has consequently raised its 2026 inflation forecast to 12.5%, but expects inflation to ease to 7.3% in 2027 as fuel-related effects fade and tighter monetary policy takes hold. The 5% inflation target is now expected to be reached in 2028. Meanwhile, damage from the war continues to constrain economic activity, making international financial assistance essential for macroeconomic stability.
2026-10-29
Ukraine Delivers Back-to-Back Rate Hikes
The National Bank of Ukraine raised its key policy rate by 50bps to 16% on its September 2026 decision, following up on the 50bps hike in its previous meeting, which was the first hike in 18 months. The Board of the central bank noted that underlying inflationary pressures continued to increase due to second-round effects from supply shocks on global energy markets. Inflation in Ukraine rose to 8.1% in August, slightly ahead of expectations by the central bank, as the escalation in the war in the Middle East triggered a sharper than expected jump in fuel inflation. In turn, the labor market remained relatively stable in the period, with robust employment and higher wage growth. The developments warranted more restrictive interest rates, which will also support the hryvnia and prevent capital outflows from residents and domestic companies.
2026-09-17
Ukraine Raises Interest Rate by 50bps
The National Bank of Ukraine raised its benchmark policy rate by 50bps to 15.5% in it July 2026 decision, its first rate hike in 16 months. The Board of the central bank stated that underlying inflationary pressures have risen in recent months and are likely to lift the headline inflation rate until the end of the year, warranting higher borrowing costs. The Board also noted that higher rates will increase the attractiveness of hryvnia-denominated assets and prevent higher levels of capital flight from households and businesses domestically. The NBU estimated that inflation could rise to the 10% level by the end of the year from the current 7.2% reading in June, before easing by next year. Meanwhile, expanded fiscal stimulus is expected to support economic growth, although inflationary responses are unlikely due to the impact of the Russian military attacks on aggregate demand.
2026-07-30