From 10% to 25%, Now 16%: The National Bank of Ukraine’s Key Policy Rate

The National Bank of Ukraine (НБУ, NBU) raised its key policy rate from 15.5% to 16% on 17 September 2026, applying it from the following day, 18 September. This was the second consecutive rate rise, following July. According to the National Bank, consumer price inflation in August 2026 was 8.1% year on year.

Just before Russia’s full-scale invasion of Ukraine, the key policy rate stood at 10%. It was raised sharply to 25% in June 2022, held there for a little over a year, and has since been cut and raised in turn. Drawing on the National Bank’s decision announcements and published material, this article traces its movements and the reasons behind them up to September 2026. It does not address the outlook for future rates.

The Key Policy Rate: The Benchmark for the National Bank’s Transactions with Banks

According to the National Bank’s own explanation, the key policy rate is its “main interest rate,” the benchmark price of money. By changing the rate on its transactions with banks, the National Bank moves the terms of short-term borrowing and lending between banks, which in turn affects the interest rates banks offer on loans and deposits to businesses and households, the hryvnia exchange rate, and prices. Because banks currently have surplus liquidity, the National Bank sets the rate on “overnight certificates of deposit,” under which banks park funds with it for a single day, equal to the key policy rate.

The goal is price stability, and the National Bank targets 5% consumer price inflation. Before the full-scale invasion, it targeted a range of “5% plus or minus 1 percentage point,” aiming to return to target within 9 to 18 months. Under its current “flexible inflation targeting,” it targets a flat 5% with no range, and has extended the time allowed to return to target to a maximum of three years. The National Bank explains that after the full-scale invasion it moved to a fixed exchange rate, and then moved to this flexible approach in 2024.

No Rate Change Immediately After the Full-Scale Invasion

The key policy rate had stood at 10% since 21 January 2022. In its June 2022 announcement, the National Bank explains that when the full-scale invasion began, it judged that changing the rate would not calm expectations under the strong psychological pressure of war, and so held off on a rate decision. Instead, it prioritised keeping banking operations and payments running, fixed the exchange rate, and restricted foreign-currency transactions. The level of the fixed rate and the subsequent changes to the exchange-rate regime are covered in the article on reading Ukraine’s wartime economic data — scope, exchange rates, and telling estimates from confirmed figures.

3 June 2022: From 10% to 25%

On 2 June 2022, the National Bank decided to raise the key policy rate by 15 percentage points, to 25%, applying it from the following day, 3 June. The reasons given in the announcement were as follows.

• Consumer price inflation in April 2022 had reached 16.4% year on year, and was expected to rise further
• Low yields on hryvnia assets risked strengthening the tendency of households and businesses to convert savings into foreign currency
• Foreign currency sold by the National Bank to support the exchange rate rose from a monthly average of $2 billion in March–April to $3.4 billion in May

The National Bank stated that a large rate increase would boost interest in hryvnia assets, curb the depletion of foreign reserves, and hold down price rises.

Cuts from July 2023, Rises from December 2024, and Rises Again in 2026

The key policy rate remained unchanged at 25% until July 2023. Subsequent changes were as follows.

The dates in the table are when each rate took effect. Decisions are usually announced the day before they take effect; for example, the September 2026 increase was made by Board Decision No. 313 of 17 September, and took effect on 18 September.

In its July 2023 announcement beginning the cuts, the National Bank cited inflation slowing faster than expected and the foreign-currency market stabilising. On 3 October of the same year, it abandoned the fixed exchange-rate regime and moved to “managed flexibility,” under which the rate is set by trading in the interbank foreign-currency market. The National Bank cites the fall in inflation from 26.6% to 8.6% over the first eight months of 2023 as one of the conditions for this move.

The Reasons for the September 2026 Increase

The 17 September announcement gave the following reasons for the increase.

• The escalation of the war in the Middle East pushed fuel prices up more than expected, and August inflation slightly exceeded the National Bank’s July forecast
• Some utility tariffs rose faster because of the effects of Russian attacks on critical infrastructure
• Business costs — electricity, logistics, labour and more — kept rising, keeping underlying inflation high
• International financing inflows in July–August were smaller than expected, reducing foreign reserves. Much of this financing is conditional on the Verkhovna Rada passing reform legislation

The National Bank states that raising the rate will preserve the attractiveness of hryvnia assets and stability in the foreign-currency market, hold down the inflation outlook, and bring inflation down toward the 5% target. At the same time, it says it would consider easing its tightening if a deterioration in the security situation were to cool consumption and employment.

According to the State Statistics Service, consumer prices in August 2026 rose 0.1% from the previous month. The 8.1% figure the National Bank cites is the year-on-year comparison.

Reading These Figures

• The key policy rate is not itself the rate at which banks lend to businesses and households. There is also a state interest-subsidy scheme that lowers the burden on businesses (see the article on Ukraine’s “5-7-9” SME loan programme, where hiring two new employees brings the rate down to 5%)
• Inflation figures differ greatly depending on whether they are year on year or month on month. The National Bank’s announcements mainly use year-on-year figures
• The National Bank’s outlook (its forecasts for inflation and growth) changes if its assumptions change. It should be cited separately from actual figures