The National Bank of Ukraine (NBU) will change the mechanism for placing three-month capped deposit certificates effective August 7, 2026. Instead of fully satisfying banks’ bids, the central bank will conduct interest rate auctions with a predetermined allotment volume once every two weeks, according to a statement published on the regulator’s website.
The NBU said this would mark the first stage of modernizing the operational framework of its interest rate policy, aimed at stimulating money market activity, developing market-based benchmarks for the cost of funds, and improving the effectiveness of monetary policy transmission.
The volume of three-month deposit certificates offered by the National Bank will be determined based on the need to preserve the attractiveness of hryvnia-denominated instruments while maintaining incentives for banks to compete for depositors.
Banks’ ability to place liquidity in these certificates will continue to depend on their activity in the market for household term hryvnia deposits. However, the actual allocation volume will be determined through the auction process.
The first interest rate auction will take place on August 7. The NBU will announce the auction volume the day before, while the results will be published after the auction is completed.
The regulator said that the current operational framework, including the introduction of three-month deposit certificates in April 2023, has strengthened interest rate transmission, enhanced the signaling role of the key policy rate, and increased competition among banks for depositors.
As of July 2026, the average yield on term deposits exceeded 14%, compared with 9-12% in 2022. Since the beginning of 2026, household holdings of term hryvnia deposits have increased by nearly 10%, while since the start of Russia’s full-scale invasion they have doubled.
Household investments in hryvnia-denominated domestic government bonds have increased by 1.5 times since the beginning of 2026 and by nearly eightfold since the start of the full-scale invasion.
The NBU explained that the changes are necessary because certain elements of the current operational framework have begun to limit the strengthening of the signaling role of the key policy rate and reduce incentives for further money market development.
Subsequent stages of the modernization will be implemented gradually, taking into account their impact on the money market, deposit rates, demand for hryvnia-denominated assets, and overall monetary conditions.
As reported, the NBU introduced three-month capped deposit certificates in April 2023, linking banks’ ability to invest in the instrument to the volume and growth rate of household term hryvnia deposits.
The regulator subsequently adjusted the parameters of the instrument several times. Beginning in April 2024, the increase in household hryvnia deposits with maturities exceeding 93 days used to calculate banks’ allocation limits started to be measured over the previous 12 months. Beginning in April 2025, the NBU increased the multiplier applied to such deposit growth from 3 to 3.5 and widened the spread between the key policy rate and the rate on three-month deposit certificates by 1 percentage point.
