The Board of the National Bank of Ukraine has decided to raise the key policy rate to 15.5% per annum and adjust the parameters of the operational design of interest rate policy, the NBU press service reports.
These decisions are aimed at maintaining the attractiveness of hryvnia savings, preserving the stability of the foreign exchange market and controlling inflation expectations, which will help return inflation to a steady decline towards the 5% target.
The NBU will be ready to take additional monetary measures if risks to price dynamics and inflation expectations increase further.
Inflation continued to rise as expected at the beginning of the year, including due to the growing influence of fundamental factors. In January, inflation accelerated to 12.9% year-on-year. The NBU estimates that inflation continued to rise in February.
Inflation will continue to rise in the coming months as the impact of last year's poor harvest and higher production costs continue to be reflected in the economy.
Inflation should return to a decelerating trajectory in the second half of the year and decline to single digits by the end of the year. Over the policy horizon, inflation will decline to the 5% target.
The key risk to inflationary dynamics and economic development remains a full-scale war.
In January this year, the NBU raised its key policy rate to 14.5%.