Raising the key policy rate from 15.5% to 16% will ensure sufficiently tight monetary conditions, so no further tightening of interest-rate policy will be required, and its next change will be a cut in 2027, according to the expectations of seven of the 10 members of the Monetary Policy Committee (MPC) of the National Bank of Ukraine at a September 16 meeting.
"The NBU will keep the rate unchanged over the coming months and in 2027 will be able to move toward cautious easing of interest rate policy as inflationary risks subside," the National Bank quoted them as saying in a statement posted on its website Monday.
According to the statement, at the same time, two participants in the discussion are convinced that persistent price pressures and a significant increase in medium-term risks to inflation dynamics and expectations could lead to an adjustment of the projected rate path when the NBU updates its macroeconomic forecast in October. In their view, the new forecast could envisage at least one additional rate hike. Despite this, they also believe that in 2027 the National Bank will be able to shift to monetary easing.
Only one of the MPC members present sees the possibility of moving to rate cuts more quickly. In his view, disinflationary factors associated with weaker economic activity could become more pronounced in the coming months; accordingly, the NBU would have grounds to return to a rate-cutting cycle before the end of 2026 and continue it in 2027.
"Despite differences in their assessments, the discussion participants agreed that, given the high level of uncertainty, the NBU should respond flexibly to changes in the distribution of risks to price dynamics and inflation expectations. If these risks intensify, additional measures to contain inflation are likely. However, if a deterioration in the security situation in the coming months leads to a noticeable cooling of consumer demand and the labor market, the NBU will consider easing monetary conditions," the release on the results of the MPC meeting said.
The National Bank added that when revising its macroeconomic forecast in October, it would comprehensively assess the consequences of the deterioration in the security situation for inflation dynamics and economic activity, as well as the prospects for receiving the planned amounts of external financing by the end of the year. The results of this assessment will be taken into account in determining the future path of the key policy rate.
As reported, at the end of January 2026, the National Bank cut the key policy rate from 15.5% to 15% per year and subsequently kept it at that level for three consecutive meetings. At the previous meeting in July, the regulator unexpectedly raised the rate by 0.5 percentage points to 15.5% per year and announced another possible increase by the end of the year, which it has now implemented effective September 18.
The next meeting of the NBU Board on monetary policy issues will be held on October 29, 2026.
