On July 30, the National Bank raised its key policy rate to 15.5% per annum — by half a percentage point. NBU Governor Andrii Pyshny explained it simply: price pressures in the economy are intensifying persistently, not temporarily, and keeping the rate at its previous level would mean allowing inflation to accelerate further.
What changed over half a year
In January 2026, the NBU had already lowered the rate — from 15.5% to 15%. Now the regulator is returning to the same level it started from. In fact, the monetary easing cycle has been disrupted before it truly began. The reason is that business costs are rising faster than expected: logistics, labor payments, and energy resources are all becoming more expensive simultaneously.
The NBU also revised its inflation forecast for the worse: by the end of 2026, consumer inflation is expected to accelerate to 10%, core inflation to 9.2%. This is not a one-time jump, but a trend fueled by budget stimulus, wage growth, rising fuel prices, and a weaker hryvnia.
What this means in practice
The key policy rate is not an abstract indicator, but the basis from which banks calculate interest rates for depositors and borrowers. An increase in the NBU's rate typically leads to higher rates on deposits and government bonds — keeping hryvnia becomes more profitable. At the same time, loans, particularly mortgages and business loans, risk becoming more expensive or at least not becoming cheaper in the near term.
The regulator's logic is simple: if saving hryvnia becomes more profitable, people are less inclined to spend it immediately or convert it into dollars and euros. This reduces pressure on the foreign exchange market and helps prevent excessive currency volatility.
Why this may not be the last increase
The NBU directly states it is ready to raise the rate further if price risks do not begin to ease. This means that depositors may receive even higher deposit rates over the course of the year, and borrowers may face even more expensive loans.
The question is not whether inflation will stabilize on its own, but how many rate hike cycles the NBU will need to go through before budget stimulus and wage pressures stop outweighing monetary tightening.
