Bankers failed to reach a consensus on the National Bank of Ukraine (NBU)’s decision on the policy rate at the 29 October meeting: of five respondents, two forecast the rate will be kept at 16%, two expect a rise to 16.5%, and one considers both scenarios possible.
Banks’ positions on the policy rate
Oleksandr Pecherytsyn, director of the analytical research department at Raiffeisen Bank, believes that despite the acceleration of inflation in September the National Bank of Ukraine (NBU) will keep the rate unchanged because of worsening economic dynamics. He said: “A rate hike will not directly restrain inflation caused by such supply shocks.”
Inna Provotar, head of management accounting and business analysis at OTP Bank, sees the possibility of an increase to 16.5% and says: “An additional 0.5 percentage points (p.p.) is not so much about materially tightening monetary policy as it is about giving the market confidence that the National Bank of Ukraine is keeping the situation under control. At present, confidence in the hryvnia is at least as important as the level of the rate itself.”
Roman Lepak, director of the strategy and corporate governance department at Kredobank, expects the rate to be kept at 16% but does not rule out a rise at the next meeting in December. Oleg Trybulkin, deputy chairman of the bank’s management board and head of risk management, by contrast, forecasts a 0.5 percentage point increase to 16.5% due to accelerating inflation and rising fuel and logistics costs.
Dmytro Zamotaiev, director of the retail business department at Globus bank, considers both scenarios realistic but currently leans slightly towards keeping the rate at 16%, noting that a rise could support the attractiveness of hryvnia savings and curb demand for foreign currency.
Banks’ view on inflation and gross domestic product (GDP)
Bankers expect a deterioration in estimates for economic growth and an upward revision to inflation forecasts compared with the NBU’s July forecast. Raiffeisen Bank predicts a worsening of most indicators, including economic growth, inflation and international reserves, while nominal GDP may not change markedly because higher inflation would partly offset weaker real growth.
Kredobank assesses the new forecast for real GDP as close to 0% in 2026 and 0.5−1% in 2027, and inflation at around 11% in 2026 and 7.5−9% in 2027. Globus bank allows for an upward revision to the inflation forecast and a downgrade to the economic growth estimate compared with the July projection of 1.8%, owing to risks related to attacks on infrastructure, higher fuel prices and uncertainty over financing.
Dollar exchange-rate forecasts to the end of the year
Raiffeisen Bank expects the dollar to approach 46 UAH/$1 by year-end and may slightly exceed that level due to a global strengthening of the US currency. A representative of Globus bank forecasts the rate will mostly trade within 45.5−46 UAH/$1 in the coming weeks and allows for a gradual move of the official rate towards 46.5 UAH/$1 by year-end.
Banks say the main factors shaping the exchange rate will remain NBU policy, importers’ demand for foreign currency, inflation expectations and inflows of external financing.
