Andriy Pyshnyy: National Bank of Ukraine press briefing - monetary policy decisions
Speech by Mr Andriy Pyshnyy, Governor of the National Bank of Ukraine, at a press briefing on monetary policy decisions, Kyiv, 30 July 2026.
On July 30, 2026, Andriy Pyshnyy, Governor of the National Bank of Ukraine, addressed a press briefing to discuss monetary policy decisions. The Board of the National Bank has raised the key policy rate to 15.5% due to persistent inflationary pressures and accelerating headline inflation. This rate increase aims to preserve hryvnia-denominated assets, stabilize the foreign-exchange market, and control inflation expectations. The NBU is prepared to continue tightening its interest rate policy to contain price pressures.
In June, consumer inflation slowed to 7.2% due to increased supply of raw food products, but core inflation accelerated to 8.1% year-over-year, surpassing the NBU's projections. The rise in underlying price pressures is primarily due to rising business costs, such as logistics, wages, and energy. Inflation expectations have remained sustainable, albeit elevated. Inflation is expected to accelerate during the second half of 2026 and then return to a downward trajectory in 2027, largely because of the NBU's measures.
According to NBU estimates, consumer inflation is projected to increase further to 10% and 9.2% by the end of 2026. Inflation should decline in 2027 (to 6.9%) and reach the 5% target by the end of 2028, supported by a gradual reduction in the budget deficit, easing labor market pressures, increased harvests, and improved energy sector conditions as security risks subside. The NBU's monetary policy measures will also significantly impact economic growth.
Ukraine's economic growth in Q2 2026 resumed due to improvements in the energy system and higher government spending amid reduced uncertainty about external assistance. Real GDP grew by 0.8% year-over-year. However, Russia's intensified attacks on logistics infrastructure, the energy sector, and business facilities are hindering even greater growth.
Nonetheless, more accommodative fiscal policy, substantial economic momentum from directing foreign financing toward weapon production localization, and a larger harvest than the previous year will contribute to economic revival in the second half of 2026.
Consequently, the NBU has revised its forecast for real GDP growth in 2026 upwards to 1.8%. Economic growth is expected to accelerate to around 3% in 2027-2028, driven by increased investment in expanding production capacity, particularly in the defense industrial base, stabilization of the energy sector, and further harvest increases.
International aid, including the Ukraine Support Loan, will ensure non-monetary budget deficit financing and maintain a sustainable foreign exchange market. The NBU's role in the foreign exchange market will expand, as foreign exchange inflows will increase to nearly USD 70 billion by year-end.
Written by urgent.news from BIS Central Bank Speeches's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
