The Board of the National Bank of Ukraine (NBU) has decided to keep its key policy rate at 13%, but from September 20, 2024, interest rates on three-month certificates of deposit and interest rates on refinancing loans will be decreased by 0.5 percentage points (p.p.) and 1 p.p., respectively.

"Taking into account the balance of risks, the need to bring inflation back to its 5% target in the coming years, and to ensure the sustainability of the FX market, the NBU Board decided to keep the key policy rate at 13%," the regulator said in a press release on Thursday.

In July, the NBU suspended its interest rate easing to maintain an appropriate level of yields on hryvnia instruments and currently believes it expedient not to resume the cycle of key policy rate cuts.

The September's decision to keep the key policy rate at 13% aims to maintain interest in hryvnia savings and to restrain demand on the FX market.

The NBU said that in recent months, interest rates on hryvnia instruments have been declining, reflecting the impact of previous monetary easing measures.

"However, the yields on hryvnia deposits and domestic government debt securities remain sufficient to protect hryvnia savings from being eroded away by inflation. The latter remains one of the important tasks for the NBU," the regulator said.

The NBU Board also decided to change the parameters of other monetary policy instruments and operations. Interest rates on overnight certificates of deposit will continue to equal the key policy rate.

"More specifically, from 20 September 2024, interest rates on three-month certificates of deposit will be cut to 15.5%. Interest rates on refinancing loans will be also decreased, to 16%, while the maximum loan term will be limited to 14 days," the central bank said in the press release.

Currently, the rate for three-month certificates of deposit is 16%, and for refinancing loans it is 17% per annum.