NBU holds rate at 15.5% as poor crop outlook fuels inflation risks

UKRAINE - In Brief 25 Jul 2025 by Dmytro Boyarchuk
On July 24th, yesterday, the NBU Board left the prime rate unchanged at 15.5% for the third consecutive time. Concerns about the 2025 crop outlook are among the key reasons behind this decision. Wheat yields are expected to be about 5% lower than last year, and projections for other crops are also modest, according to Deputy Minister of Agrarian Policy and Food of Ukraine Taras Vysotskiy. Against this backdrop, hopes for a swift easing of inflation are fading. Unsurprisingly, under current circumstances, the NBU is speaking more about potential tightening measures rather than monetary easing. The NBU also lowered its GDP growth forecast for 2025 to +2.1% y/y, down from +3.1% y/y projected in April. The inflation forecast was worsened to +9.7% YTD, compared to +8.7% projected previously. The next Monetary Committee meeting is scheduled for September. Monetary easing is certainly off the table, and if conditions deteriorate further, tightening moves appear very likely.

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