The National Bank of Ukraine reduced the discount rate from 20% to 16%, but left interest rates on its operations with banks unchanged. In this way, the NBU is trying to prevent deposit rates from falling, meaning that the key policy rate cut should not shake the stability of the foreign exchange market.


The new rate level will take effect on October 27. This is the third time the NBU has cut the key policy rate in 2023. The first time it happened in late July (from 25% to 22%), and then in September (to 20%). Thus, the regulator is adhering to its announced liberalization course.

"Under this design, the discount rate will determine the rate on overnight certificates of deposit (CDs) (16%), and rates on other NBU operations with banks will be built up from the discount rate. For example, for three-month CDs, they will be "discount rate + 4 pp" (20%), and for refinancing loans - "discount rate + 6 pp" (22%). Thus, in fact, the interest rates on the NBU's operations with banks will remain unchanged," NBU Chairman Andriy Pyshnyi explained at a briefing.

The NBU predicts that such changes will, in particular, allow the NBU to keep short-term hryvnia interbank rates close to the discount rate. This will increase the NBU's ability to influence the expectations of economic agents and the motives of their economic behavior.