These decisions are aimed at maintaining the attractiveness of hryvnia savings, preserving the stability of the foreign exchange market and controlling inflation expectations.
The National Bank of Ukraine ( NBU ) has decided to raise the key rate from 14.5% to 15.5% per annum from March 7, 2025. The rate is being raised for the third time in a row.
The head of the NBU, Andriy Pyshnyy, announced this at a briefing.
As Pyshny noted, these decisions are aimed at supporting the attractiveness of hryvnia savings, maintaining the stability of the foreign exchange market and controllability of inflation expectations, which will allow inflation to return to the trajectory of sustainable slowdown to the target of 5%.
“The NBU will be ready to take additional measures in the event of further increases in risks to price dynamics and inflation expectations,” he said.
In addition, to enhance the attractiveness of hryvnia savings, the NBU is making changes to the parameters of the operational design of the interest rate policy. Thus, from April 4, 2025:
- the spread between the discount rate and the rate on three-month deposit certificates will increase by 1 p.p.;
- the spread between the key rate and the overnight lending rate will also increase by 1 p.p.;
- the ability of banks to place funds in three-month deposit certificates will be expanded depending on the success of increasing the portfolio of hryvnia deposits of the population with a term of more than three months over the past 12 months (the multiplier will increase from 3 to 3.5).
“Such changes will strengthen market incentives for banks to attract term deposits of the population in hryvnia. This will contribute to further growth of interest rates on term hryvnia instruments, and accordingly – strengthening the protection of hryvnia savings of citizens from inflationary depreciation. As a result, risks for price dynamics, the foreign exchange market and international reserves are expected to decrease,” the head of the NBU noted.
The rate is the main tool for adjusting inflation by central banks around the world. If the rate is raised, the rate of price growth should slow down in a few months.
The NBU declares an inflation target of 5.0%. However, last year prices grew by 12.0%, and in January 2025 price growth accelerated to 12.9%. According to the NBU forecast, inflation will be 15% in the coming months, after which it will begin to decline to 8.4% by the end of the year.
The discount rate determines the rate at which the NBU provides loans to commercial banks and accepts deposits from them. The discount rate affects the overall level of interest rates in the economy, including rates on loans and deposits for businesses and individuals.
Change rate
It should be noted that the NBU kept the key rate at 10% since the beginning of the war and decided to raise it to 25% in June 2022. This rate was maintained until July 2023, when the NBU began to lower the rate to 15%. The NBU also lowered the rate in 2024. Since June, it kept it unchanged at 13%. But in December 2024, the NBU raised the rate to 13.5%, in January – 14.5%.
A change in the key rate is an important signal for market participants about the direction of the NBU's monetary policy and the general economic situation of the country.
Earlier, TSN.ua reported what situation is expected on the currency market in the coming weeks .
Read also:
- Cryptocurrency vs. Gold: What Will Become the Main Means of Preserving Capital in the Future
- Cryptocurrency for Dummies: How to Become a Millionaire and How Not to Go Bankrupt
- Prices are growing by leaps and bounds: which products have become the most expensive