Most members of the monetary policy committee of the National Bank of Ukraine (NBU) see the possibility of lowering the refinancing rate by 1-2 percentage points (p.p.) during 2024 from the current 15%, but several of their colleagues believe that it is advisable to keep the rate at the existing level, the central bank published the results of the committee discussion on December 13 on Monday.

“If the macroeconomic situation develops close to the baseline scenario and the implementation of key negative risks can be avoided, the NBU will be able to continue the cycle of easing interest rate policy. An important prerequisite for this is, in particular, the restoration of the rhythm of the flow of external assistance,” the regulator’s release conveys the opinion of the majority of members of the committee.

It is indicated that at the same time, these members of the committee agreed that in conditions of war the National Bank should act carefully so as not to undermine macro-financial stability. In particular, the regulator is obliged to maintain the attractiveness of hryvnia instruments and assets for savings in order to ensure exchange rate stability and moderate inflation.

"Given this, the space for further reduction of the key policy rate is insignificant. Several of the discussion participants noted that this is a maximum of 1-2 percentage points during 2024. But, according to several other members, it would be advisable to keep the rate unchanged for next year,” stated the regulator’s release following the discussion.

According to it, all 11 members of the committee on December 13 voted to reduce the refinancing rate from 16% to 15% per annum.

Earlier, at the end of October, the National Bank, when revising the forecast trajectory of the key policy rate, indicated that it was most likely that the rate would be maintained at 15% in 2024.