The National Bank of Ukraine (NBU) has voted to keep its key policy rate unchanged at 15.5%, saying that uncertainty around future foreign financing may trigger pro-inflationary risks if ongoing negotiations lead to no decision.
Despite previously warning that war and energy strikes could keep inflation expectations uneven, the NBU has now kept the key rate at the same level for six consecutive meetings (since March 2025).
If negotiations over 2026-2027 financing for Ukraine get stuck, the NBU cautioned that this could trigger “a whole set of powerful pro-inflationary factors,” NBU Governor Andriy Pyshnyy said, responding to questions from Kyiv Post during the briefing.
The NBU announced its decision on Thursday.
Pyshnyy explained that the NBU assesses a “wide set of factors” when determining how wartime conditions shape inflation expectations. The central bank insisted on maintaining tight monetary conditions to support the hryvnia and stabilize expectations.
“Negotiations on providing Ukraine with external financing are still ongoing. If they conclude differently from what we anticipate, a range of strong pro-inflationary factors could materialize,” Pyshnyy said, adding that the NBU must keep expectations anchored and the foreign exchange market stable until greater clarity emerges.
Inflation, which the regulator previously projected would peak in May and gradually decelerate, remain slightly below the NBU’s trajectory according to the October 2025 Inflation Report. However, Pyshnyy stressed that uncertainty means maintaining a cautious approach until key international decisions are finalized.
Pyshnyy said that the NBU still observes high inflation expectations among businesses and households, with search data indicating rising public concern about prices.
Inflation slowed to 9.3% year-over-year in November, with core inflation also 9.3%, marking a turn towards single-digits after a year of double-digit figures. The drop in inflation is driven mainly by increased food supply from new harvests, the NBU says.
He added that the high rate has not decreased lending activity.
The NBU said it will adjust its policy as needed. If inflation risks increase, especially due to interruptions in foreign financing, it is prepared to delay easing or introduce additional measures. If risks ease, the bank could begin rate cuts consistent with its October forecast.
War uncertainty and energy deficits shape the outlook
Ukraine’s central bank warned that the full-scale war remains the dominant risk to price stability, alongside the possibility of disruptions to foreign aid, increased defense spending, further damage to energy infrastructure, and worsening labor shortages.
The so-called “positive risks” – outcomes that are better than expected – are also possible, the NBU wrote, pointing to increased military and financial support from international partners, as well as efforts to “ensure a just and lasting peace for Ukraine.”
In 2025, the flow of international aid has remained unstable – Ukraine has received $45.8 billion since the start of the year, with another $5 billion expected by year-end, the NBU wrote.
The newly appointed Deputy Governor Volodymyr Lepushynskyi added that current energy shortages remain within the bounds of the NBU’s assumptions for the fourth quarter but warned that risks persist due to continued Russian strikes.
“However, this in no way can guarantee that the situation, that our assumptions, will continue to hold. The situation is dynamic, the repairs are quite rapid… although the number of strikes in recent periods has been very significant,” Lepushynskyi said, replying to a question from Kyiv Post.
Higher energy costs could feed into prices, he said, while supply disruptions may weigh on production and exert additional inflationary pressure.
Ukraine saw this last year, when a rapid electricity price increase was needed to cover the extra cashflow for battered energy companies, with the addition of increased purchases of energy equipment for businesses.
At the same time, Lepushynskyi said weakening consumer sentiment amid security concerns may partially offset these effects.
Keeping the rate unchanged in October should help the NBU sustain interest in hryvnia assets and support growth in household term deposits and domestic government securities.
Ukraine’s GDP shows faster growth in Q3
Ukraine’s State Statistics reported Q3 GDP at 2.1% - a rapid increase from last quarter’s weak 0.8% results.
Commenting on the latest GDP data, Lepushynskyi told Kyiv Post that the reported figure fully matched the NBU’s forecast. Economic activity was driven primarily by household consumption, which expanded by 6.6%, and a rebound in investment.
Construction activity also increased, reflecting both post-strike reconstruction and defense-related demand. Growth in public administration, he noted, was expected given Ukraine’s large budget deficit and associated spending needs.
“The picture is broadly aligned with our expectations, but the war continues and uncertainty remains high,” Lepushynskyi said. “We will assess the results of the fourth quarter when we release a January macro forecast,” he replied, adding that the NBU will include revised assumptions on energy sector disruptions and external financing when it all settles.