Ukraine’s central bank said it may cut its key policy rate later this year, as inflation and financial conditions broadly develop in line with expectations, even as the economy shows signs of slowing, reported Ukraine Business News.

The National Bank of Ukraine (NBU) said most members of its Monetary Policy Committee anticipate the discount rate will fall to 14.5% per year by December, in line with a trajectory outlined in July that foresees a further decline to 14.5% by end-2025 and 12.5% by end-2026.

However, some policymakers flagged risks from the ongoing war and mounting fiscal needs, which they said had “intensified and partially materialised.” Taking these factors into account, the NBU now expects the rate could hover between 13% and 14% at the end of next year.

The guidance comes as Ukraine’s economy struggles to maintain momentum. Real gross domestic product grew by just 0.8% year-on-year in the second quarter of 2025, and by 0.2% quarter-on-quarter on a seasonally adjusted basis, according to the State Statistics Service.

Ukraine has maintained relatively tight monetary policy since the war began in 2022 to support the currency and contain inflation, which spiked in the early months of the war. The NBU began cutting rates in 2023 as price pressures eased, but it has balanced this with the need to ensure stability amid heavy government borrowing and continued security risks.

Analysts say any easing of rates could help stimulate credit and investment, though persistent uncertainty and high defence spending may continue to weigh on economic growth.