Ukraine Holds Interest Rate at 15%

The National Bank of Ukraine maintained its benchmark policy rate at 15% in its March 2026 meeting after delivering a 50bps cut in its first decision of the year. The hold contrasted with the earlier possibility that the central bank would attend to growth concerns and the labor market and continue to make monetary policy more accommodative. However, the outbreak of war in the Middle East and its risk on global energy supplies triggered surges in key energy prices, raising inflationary risks for the Ukrainian economy. Further, the geopolitical concerns lifted global demand for the dollar and pressured the hryvnia, further limiting the room for lower borrowing costs. Inflation had increased to 7.6% in February after a long period of decreases. The central bank signaled that it will refrain from resuming rate cuts until there is clear evidence that energy prices are not translating to unanchored inflation expectations.