NBU Keeps Key Rate at 15.5% and Forecasts Decrease in 2026

The National Bank of Ukraine has decided to maintain the key rate at 15.5%. This was announced on October 23. The regulator notes that despite the decrease in inflation over the past few months, inflation expectations remain elevated, and the risks of price increases have intensified due to energy shortages and significant budgetary needs.

This is reported by AgroReview

Inflation Dynamics and Key Factors

In September, consumer inflation slowed to 11.9% year-on-year, and this trend continued in October. The accelerated decline in inflation rates is primarily attributed to an increase in vegetable supply due to better harvests compared to last year. However, core inflation decreased more slowly – to 11% year-on-year in September. The main price pressure remained steady, linked to significant business costs for wages and energy resources. As a result, the rates of price decreases for certain components of core inflation were minimal or completely absent.

“Under these conditions, to maintain the attractiveness of hryvnia assets, the stability of the currency market, and a sustainable trend of inflation reduction towards the target of 5% in the policy horizon, the NBU will support relatively tight monetary conditions. Inflation is decreasing; however, fundamental price pressure remains persistent, and expectations do not show signs of sustainable improvement,” the statement reads.

Forecasts for the Key Rate and Economic Dynamics

The National Bank emphasizes that monetary policy is aimed at achieving an inflation target of 5%. The reduction in inflation will be influenced by the effects of this year’s vegetable and grain harvests, further increases in agricultural production, and measures to support interest in hryvnia assets and the stability of the currency market.

Partial reductions in labor market imbalances are also expected, which will slow the growth of real wages and, accordingly, reduce pressure on business costs. At the same time, additional costs for enterprises to ensure operations under conditions of electricity shortages and rising administratively regulated prices remain restraining factors.

According to the NBU’s forecast, inflation will decrease to 9.2% in 2025, to 6.6% in 2026, and reach the target level of 5% by the end of 2027.

Economic growth, according to the National Bank’s assessment, continues, but its pace will remain restrained due to the consequences of the war. The baseline scenario of the October macroeconomic forecast anticipates that the reduction of the key rate will begin in the first quarter of 2026. The next NBU Board meeting on monetary policy is scheduled for December 11.