The Board of the National Bank of Ukraine (NBU) unexpectedly raised the key policy rate by 0.5 percentage points to 15.5% per annum due to the persistent strengthening of underlying inflationary pressures and the expected acceleration of inflation through the end of the year.
"The NBU remains prepared to continue using its monetary policy instruments, including further tightening of its interest rate policy, in order to contain price pressures," the regulator said in a press release on Thursday.
The central bank’s current forecast allows for the possibility of a further increase in the key policy rate, with a return to the monetary easing cycle expected in the second quarter of 2027.
The rate hike is intended to support the attractiveness of hryvnia-denominated assets, preserve foreign exchange market stability and well-anchored inflation expectations, and help return inflation to a downward trajectory in 2027.
The NBU noted that consumer inflation slowed to 7.2% year-on-year in June due to increased supplies of unprocessed food products, while core inflation accelerated to 8.1% and exceeded the central bank’s forecast.
The regulator projects consumer inflation at 10.0% and core inflation at 9.2% by the end of 2026. Inflation is expected to slow to 6.9% in 2027 and reach the target level of 5% by the end of 2028.
As reported, at the end of January 2026 the National Bank reduced the key policy rate from 15.5% to 15.0% per annum and subsequently kept it unchanged at three consecutive monetary policy meetings.
The minutes of the Monetary Policy Committee meeting that preceded the decision to raise the key policy rate to 15.5% per annum will be published on August 10.
The next meeting of the NBU Board on monetary policy issues is scheduled for September 17, 2026.
