The National Bank decided to keep the discount rate at 13%

The Board of the National Bank of Ukraine (NBU) decided to keep the discount rate at 13%. This was announced by Andriy Pishnyi, the head of the NBU, during a press briefing on monetary policy.

This decision is aimed at ensuring the stability of the foreign exchange market and achieving the inflation target of 5% over the forecast horizon. We will remind that the previous reduction of the discount rate from 13.5% to 13% took place on June 14, 2024.

According to Andrii Pyshnyi, inflation during the last months expectedly accelerated and approached 5%. After a long period of decline, inflation began to rise in May, and in June accelerated to 4.8% in annual terms. Core inflation was in line with NBU forecasts and amounted to 5% in June.

It is predicted that inflation will continue to rise, but will begin to gradually decrease already next year. This will be influenced by rising business costs, higher excise taxes, as well as the exhaustion of the effects of last year's high harvests and the negative impact of the summer drought on this year's yields.

According to the updated NBU forecast, inflation will reach 8.5% by the end of the year. Inflation is expected to slow to 6.6% in 2025 and return to the target level of 5% in 2026. The regulator said the key rate will remain at 13% until the end of this year, with further easing in 2025.

Despite the decrease in interest rates on deposits and bonds of the domestic government loan (OVDP), they remain at a level that allows citizens to preserve their savings against inflation. However, the further acceleration of inflation may lead to a decrease in the profitability of these instruments, therefore the regulator considers it appropriate to maintain the discount rate at the current level.

In the event of a significant increase in price pressure, the NBU is ready to strengthen monetary policy. Such measures will be aimed at supporting the stability of the financial system and achieving the country's long-term macroeconomic goals.