KYIV: The National Bank of Ukraine has increased its key policy rate by 50 basis points to 13.5% during its December meeting, marking the first rate hike since June 2022. The move aims to stabilize the foreign exchange market, manage inflation expectations, and achieve an inflation target of 5%.
According to Anadolu Agency, the decision follows three consecutive meetings where the rate was held steady at 13%. The central bank’s recent action comes in response to a faster-than-expected rise in inflation, which reached an annual rate of 11.2% in November, the highest since July 2023.
In June 2022, the National Bank of Ukraine had previously raised its interest rate from 10% to 25% to protect household income and savings in the national currency, the hryvnia, and to enhance the appeal of hryvnia assets. This was also intended to reduce pressure on the foreign exchange market and curb inflationary pressures amid the ongoing war.