The National Bank of Ukraine (NBU) has decided to increase the discount rate from 14.5% to 15.5% per annum, starting from March 7, 2025. This is the third consecutive rate increase, which is aimed at supporting the attractiveness of savings in hryvnia, maintaining the stability of the foreign exchange market, and controlling inflation expectations, which will ensure a further slowdown in inflation to the target level of 5%.
The NBU Chairman, Andriy Pyshny, noted that if the risks to inflation dynamics increase, the National Bank will be ready to take additional measures. Also, from April 4, 2025, the NBU is making changes to the parameters of the operational design of interest rate policy, in particular, it will increase the spread between the discount rate and the rate on three-month certificates of deposit and overnight loans by 1 percentage point. This will help strengthen the incentives for banks to attract term deposits of the population in hryvnia, which will contribute to the growth of interest rates on term hryvnia instruments.
Inflation in Ukraine remains high: according to the NBU, it will reach 15% in the coming months, but will start to decline to 8.4% by the end of the year. Raising the policy rate is an important tool in the fight against inflation, as it affects the overall level of interest rates in the economy, including rates on loans and deposits for businesses and individuals.
