National Bank of Ukraine Press Briefing
During a press briefing held on Thursday, the National Bank of Ukraine (NBU) announced its decision to maintain its key policy rate at 15%. NBU Governor Andriy Pyshnyi, along with deputies Volodymyr Lepushynskyi and Yurii Heletii, presented details on the demand for hryvnia-denominated financial instruments, the state of the foreign exchange market, and an assessment of how the war in the Middle East is impacting Ukraine's economy. This decision comes as the central bank balances domestic stability with external economic pressures.
Foreign Exchange Market Conditions and Hryvnia Instrument Demand
The NBU noted that demand for hryvnia instruments remains strong. Since the start of the year, the volume of hryvnia term deposits has increased by UAH 13.4 billion, a rise of 4%. Furthermore, in February, the portfolio of hryvnia-denominated domestic government bonds (OVDP) held by the public grew by UAH 10 billion, reaching UAH 81.5 billion. Overall, since the beginning of the year, the public's hryvnia OVDP portfolio has expanded by 23%, and since the start of martial law, it has increased 6.5-fold.
The situation on the foreign exchange market remains under control. However, a 12–16% rise in fuel prices in March could add 0.45 percentage points to annual inflation. According to NBU estimates, the value of gas and oil product imports could increase by USD 1.5–3 billion by year's end. A probable rise in the value of fertilizer imports by approximately USD 140 million is also expected.
The NBU plans to publish a new forecast in April. The impact of the Middle East war on Ukraine's economy is assessed as limited, while its effect on prices is more pronounced. These factors may influence the NBU's future monetary policy decisions.
Maintaining the key rate at 15% signals the NBU's intent to curb inflation and preserve stability in the currency market amidst uncertainty driven by external factors.
The growing demand for hryvnia instruments may indicate recovering confidence in the national currency, yet rising fuel and energy prices pose additional risks to the economy. In the context of global events like the Middle East conflict, monitoring subsequent changes in the NBU's monetary policy and their effect on Ukraine's economic situation remains crucial.
As the National Bank of Ukraine maintains its key rate, the dynamics of the hryvnia against the US dollar continue to evolve. Recently, the official exchange rate was reported at 44.16 UAH per USD, reflecting the currency's strengthening position. Understanding these fluctuations is essential for assessing the broader economic landscape, especially in light of recent monetary policy decisions. For further insights into the current exchange rate trends, see the detailed report on the hryvnia's performance against the dollar.