Prime rate held at 13.0% amid rising inflation risks

UKRAINE - In Brief 20 Sep 2024 by Dmytro Boyarchuk
On September 19th, the NBU Board left the prime rate unchanged at 13.0% for the second consecutive time, after cutting it by 50 basis points in June. Accelerating inflation (+0.6% m/m and +7.5% y/y in August), the recent turbulence in the FX market, potential tax increases, and rising costs due to missile strikes on the energy system were cited as reasons for the decision. Although the prime rate remained unchanged, the NBU reduced the rate for three-month deposit certificates (from 16.0% to 15.5%) and the refinancing rate (from 17.0% to 16.0%). Additionally, reserve requirements were increased. The NBU did not provide a timeline for potential future moves but reiterated its commitment to a flexible approach to monetary policy.

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