Inflation Hits 7.9% as Ukraine’s Central Bank Holds Key Rate at 15%

Ukraine’s Central Bank Decision

Ukraine’s central bank has decided to keep its benchmark interest rate unchanged at 15%. This move comes as annual inflation accelerated to 7.9% in March. Core inflation also rose, reaching 7.1% that same month. Inflationary pressures continued to build in April, raising concerns among economists.

Inflation Outlook and Economic Activity

By the end of 2026, inflation is projected to reach 9.4%, before easing to 6.5% by the close of 2027 and further down to 5% in 2028. According to the central bank, the rise in inflation is being driven by:

• higher energy costs;
• severe damage to the energy sector from Russian strikes;
• a sharp increase in fuel prices;
• the effects of a weaker hryvnia exchange rate;
• rapid wage growth.

Economic activity in Ukraine slowed at the start of 2026. Real gross domestic product (GDP) grew by just 0.2% year-on-year in the first quarter. As a result, the central bank has revised its 2026 GDP growth forecast downward to 1.3%. For 2027–2028, real GDP growth is expected to range between 2.8% and 3.7%.

The slowdown in economic activity is attributed to:

• the fallout from Russian attacks on energy infrastructure and logistics hubs;
• an unusually harsh winter;
• a restrained fiscal policy due to delays in foreign aid disbursements.

Still, the central bank noted that

“the catch-up in budget expenditures as international aid arrives will help revive the economy in the coming months.”

The outlook for lower inflation in 2027 is based on the fading effects of high fuel prices, easing external price pressures, stronger harvests, improvements in the energy sector, and monetary policy measures.

“Inflation will return to a path of sustained decline in 2027,”

As of April 30, 2026, official exchange rates have risen, with the U.S. dollar, euro, and Polish zloty all gaining value. Against this backdrop, it is important to monitor further economic developments and the central bank’s policy responses to these challenges.

The decision by Ukraine’s central bank to hold the key rate at 15% reflects the current economic realities and inflationary pressures facing the country. Rising prices for energy and other resources, along with slower economic growth, are serious factors that require close attention. The central bank’s next steps and the impact of international aid could significantly influence economic recovery and the stabilization of inflation.

As the central bank maintains its key interest rate amid rising inflation, understanding the official exchange rates for April becomes crucial. These rates play a significant role in shaping economic expectations and can impact consumer behavior and investment decisions in the coming months.