NBU kept the discount rate at 15.5%: when to expect a decrease

In October, the NBU Board decided to keep the discount rate unchanged at 15.5%. Some members of the Monetary Policy Committee expressed support for maintaining this level of the discount rate.

'In their opinion, since the September meeting, the risk distribution for inflation has significantly worsened. Thus, higher energy deficits and increased budget deficits may intensify price pressures. Given the heightened inflation expectations, the NBU decided to postpone the start of the discount rate reduction cycle,' the bank reported.

There are also opinions from some MPC members regarding the possibility of lowering the discount rate to 15% as early as October.

'These participants in the discussion believe that the risks to inflation dynamics remain balanced, and easing monetary conditions could support economic recovery,' the NBU noted.

Prospects for the discount rate

MPC members have expressed differing views on the possible reduction of the discount rate. Some of them believe it may not happen until January 2026.

'Significant budget expenditures and a complicated situation in the energy sector may complicate the easing of monetary policy in the coming months. Other MPC members consider the possibility of lowering the rate by the end of the current year,' the NBU told.

Important factors in this issue include progress in agreements with the IMF and reparations loans based on Russian assets. Most discussion participants hope that the discount rate could be around 12.5% - 13.5% by the end of next year.

In their latest meeting, the Board of the National Bank of Ukraine decided to keep the discount rate unchanged at 15.5%. Some experts expressed the view that risks for inflation have increased, so the central bank decided not to start the cycle of lowering rates. Future changes in the discount rate may not occur until next year, depending on agreements with the IMF and other factors affecting the country's economy.