NBU raises key interest rate — what it means for Ukrainians

The National Bank has decided to raise the key interest rate by 0.5%, effective December 13, 2024. The new rate will be 13.5% annually, aimed at maintaining the stability of the foreign exchange market and curbing inflation. Additionally, the higher rate will affect deposit yields.

Details were shared by the NBU's press service on its official website.

What the new discount rate will change

The National Bank has decided to tighten its monetary policy to reverse the inflationary trend and stabilize consumer price increases at around 5%. The increase in the key interest rate will help maintain control over inflation expectations, as prices have been accelerating significantly in recent months.

"While inflation expectations remain relatively stable, there is an increasing risk of imbalance due to heightened public attention to these processes. In 2025, inflation is expected to slow down further, with continued progress towards the 5% target. This will be supported by the NBU’s monetary policy measures and efforts to maintain stability in the foreign exchange market," the NBU noted.

Ukrainians should be aware that the key interest rate impacts the returns on hryvnia-based financial instruments. Deposits remain popular among the population, and an increase in the rate will boost demand for term hryvnia savings. As a result, there will likely be increased interest in opening deposit accounts, contributing to a reduction in pressure on the exchange rate and prices.

The National Bank emphasized that further tightening of the monetary policy could continue in upcoming meetings of the Monetary Policy Committee if signs of market stability persist and if the measures continue to have a positive impact on inflation trends.

What else should Ukrainians know

On December 10, several systemically important banks signed a memorandum at the NBU's premises to strengthen financial monitoring of clients. In 2025, Ukrainians will be divided into categories depending on their risk level to set new limits on card transfers. 

We also mentioned that the National Bank plans to launch testing of digital money — e-hryvnias. In 2025, the regulator will initiate a pilot project and invite all interested participants from the financial market to test the currency’s effectiveness. Thus, the currency will be tested not only by NBU staff but by a wide range of market participants.