NBU cuts key policy rate to 15% for the first time in 10 months

The Board of the National Bank of Ukraine has decided to start a cycle of interest rate easing by cutting the key policy rate by 0.5 percentage points, the regulator's press service said.

The decision was explained by a steady decline in inflationary pressures and reduced risks associated with external financing.

"The reduction of the key policy rate from January 30, 2026, from 15.5% to 15% is consistent with bringing inflation to the 5% target on the policy horizon and will support the economy at the same time," the NBU said.

According to the updated macroeconomic forecast, inflation will be moderate in 2026 (7.5%) and will continue to be close to the 5% target, reaching it by mid-2028.

The regulator believes that "the expected volumes of external assistance will be sufficient to finance the budget deficit without issuance and to maintain international reserves at a sufficient level to ensure the stability of the foreign exchange market."

The National Bank reminded that at the end of 2025, the EU Council decided to grant Ukraine 90 billion euros of financial assistance in 2026–2027. Support for Ukraine will continue under the existing ERA Loans mechanism. A new $8.1 billion program with the IMF is also being agreed upon.

"The key policy rate cut will facilitate further adaptation of the economy to the challenges of the war. In particular, it will support the dynamics of lending, which has been growing at a rate of more than 30% yoy in recent years.

At the same time, monetary conditions will be sufficiently tight to maintain the stability of the foreign exchange market and reduce inflation to the 5% target over the policy horizon," the NBU said in a statement.

• The key policy rate is a key indicator of the value of money in a country, which determines interest rates for loans and deposits.
• After the outbreak of war, it was sharply increased from 10% to 25% and remained at this level until July 2023. Then, due to a significant slowdown in inflation, the NBU began to gradually reduce the key policy rate until it dropped to 15% in December 2023.
• In March 2024, the NBU resumed its reductions, but in December it started to increase again. Since March 2025, the key policy rate has been at 15.5%.