The overwhelming majority – nine out of 11 – members of the monetary policy committee of the National Bank of Ukraine (NBU) at a meeting on June 12 supported reducing the refinancing rate to 13%, other proposals were to lower it to 12.5% and keep it at 13.5%, according to the results of the discussion published on Monday.

“Such a balanced step, in their opinion, is now the optimal solution. It takes into account, on the one hand, the current favorable macro-financial trends, and on the other, the projected acceleration of inflation in the second half of the year, as well as the still significant risks due to the consequences of the war,” the position of the majority is described in the press release.

It is indicated that members of the committee consider such a reduction to be justified, including taking into account the predicted trajectory of the rate in the April macro forecast and the expectations of financial analysts.

“This step by the NBU is already built into expectations, therefore the reaction of financial markets to it will be restrained and predictable,” the National Bank emphasized.

According to these committee members, setting the rate at 13% will continue to ensure the investment attractiveness of the hryvnia and the safety of deposits in the national currency from inflationary depreciation.

This position is supported by data on the positive dynamics of fixed-term investments in hryvnia, which outpaces the growth of households’ foreign currency savings in banks. The central bank also considers the high demand for government bonds at auctions of the Ministry of Finance, including long-term securities with maturity in 2-3 years, to be an indicative factor in maintaining the profitability of the hryvnia.