NBU Raises Key Rate to 16% Due to Inflation and Economic Risks

On September 17, the NBU raised the key rate from 15.5% to 16% due to high inflation and new risks to the economy, such as expensive oil and rising business costs. In August, inflation reached 8.1%, which is above the NBU's forecasts. Oil prices exceeded $100 per barrel, which could increase Ukraine's import costs by $300 million by the end of the year. For businesses, this means high current expenses and expensive loans, while banks may offer higher rates on hryvnia deposits. The NBU does not expect a sharp decline in lending, as hryvnia loans to enterprises are growing by 30% annually. In the event of further price increases, the NBU is ready to raise the rate, but if consumption decreases, a shift to easing policy may be possible.

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