An increase in the NBU key rate by 1 percentage point was supported by 7 out of 11 members of the Monetary Policy Committee, four by 0.5 percentage points.

At a meeting on March 5, seven of the 11 members of the Monetary Policy Committee (MPC) of the National Bank of Ukraine (NBU) approved an increase in the key rate from 14.5% to 15.5% per annum, effective March 7. Four members of the committee spoke in favor of raising the rate by 0.5 percentage points (pp), according to the results of the committee's discussions published on Monday.

“The NBU must be decisive and reaffirm its commitment to its mandate to ensure price stability in order to maintain confidence in monetary policy. The 1 percentage point increase in the key rate in March is in line with the main scenario of the January macro forecast and… the expectations of most financial market participants…”, the majority of the members of the Monetary Policy Committee noted.

In accordance with the protocol, the participants of the MPC believe that the set of measures taken by the NBU in March will be sufficient to overcome the price hike, change the inflation trend and will allow the National Bank to return to the cycle of easing interest rate policy in 2025.

“However, the majority of MPC members also believe that, given the upwardly shifted balance of inflation risks, the NBU should be prepared to maintain the key rate at the current level for a longer period or even to further tighten the interest rate policy in the event of the realization or intensification of risks to price dynamics and inflation expectations,” the publication notes.