As expected, the Board of the National Bank of Ukraine (NBU) raised the discount rate by 0.5 percentage points to 16% per annum, citing sustained fundamental price pressures, secondary effects from supply shocks, and heightened medium-term inflationary risks as the reasons for this decision.
“This decision will support the attractiveness of hryvnia-denominated assets and the stability of the foreign exchange market, which will help keep inflation expectations under control and return inflation to a sustainable downward trajectory toward the 5% target over the policy horizon,” the regulator noted in a press release on Thursday.
It noted that in August, consumer inflation accelerated to 8.1% year-over-year and slightly exceeded the trajectory of the NBU’s July forecast. The regulator attributed this primarily to a stronger-than-expected rise in fuel prices amid the escalation of the war in the Middle East and faster growth in certain administrative tariffs due to the consequences of Russian attacks on critical infrastructure.
The central bank expects inflation to be slightly higher in the coming months than previously projected, but to return to a downward trajectory in 2027.
The regulator also noted that official external financing in July and August was lower than expected, causing international reserves to decline. At the same time, provided Ukraine fulfills its obligations under support programs, a significant portion of the funding should be replenished in the coming months.
Among other risks, the National Bank cited the possible emergence of additional budgetary needs for defense and reconstruction, as well as increased pressure on wages due to labor shortages. At the same time, a deterioration in the security situation could cool consumer demand and the labor market, which would have a disinflationary effect.
“If, in the coming months, the deterioration in the security situation leads to a noticeable cooling of consumer demand and the labor market, the NBU will consider easing monetary conditions,” the press release states.
As previously reported, in late January 2026, the National Bank lowered the discount rate from 15.5% to 15% per annum and subsequently kept it at that level for three consecutive meetings. At its previous meeting in July, the regulator raised the rate by 0.5 percentage points—to 15.5% per annum—in a move that caught the market by surprise, and announced the possibility of another hike before the end of the year.
The NBU will announce the results of the Monetary Policy Committee’s discussion on raising the discount rate to 16% per annum on September 28.
The next meeting of the National Bank’s Board on monetary policy will take place on October 29, 2026.
