NBU cuts prime rate by 0.5 pp to 15.0% amid EU funding decision

UKRAINE - In Brief 01 Feb 2026 by Dmytro Boyarchuk
The NBU Board cut the prime policy rate by 0.5 ppt to 15.0%, effective January 30. The decision came against the backdrop of slowing consumer inflation, which decelerated to +0.2% m/m and +8.0% YTD in December 2025. However, the main trigger for the start of a new easing cycle appears to be different and is largely driven by the EU’s decision to provide €90 billion in funding for 2026-2027. By the end of 2025, gross international reserves were reported at $57.3 billion. Following the EU’s approval of the funding package, the NBU projects reserves to increase to $65 billion by the end of 2026. In addition, during the winter holiday season the NBU adjusted the hryvnia exchange rate to 43 UAH per dollar, up from 42 at the end of 2025. Taken together, these factors suggest that the NBU now feels significantly more confident about external financing risks and has likely implemented the lion’s share of its hryvnia adjustment plan for the year. In this context, the Bank appears to see limited risk in shifting toward an easing agenda. Much will depend on how the economy performs following the new wave of energy infrastructure damage in January and the possibility of further strikes in February. Still, if this interpretation is correct and the NBU indeed considers the hryvnia adjustment largely complete for 2026, the easing cycle is likely to continue. The next Monetary Policy Committee meeting is scheduled for March 19, and given the intensity of recent events, much could change by then.

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