The management of the National Bank of Ukraine (NBU) is expected to keep the discount rate at the current level of 13% per annum during the upcoming meeting on Thursday, according to bankers surveyed by the Interfax-Ukraine agency.
"We anticipate that the NBU will maintain the (discount - IF-U) rate unchanged at this meeting. It is likely that the rate will remain unchanged at the December meeting as well. However, a return to tightening monetary policy (increasing the rate) cannot be ruled out in case of further acceleration of inflation," said Artem Krasovskiy, director of the treasury and capital markets department of the main financial management of Praveks Bank.
His colleague, Alexander Pecheritsyn, director of the analytical research department at Raiffeisen Bank, believes that the current rate level is acceptable for the next two reviews this year.
"However, if the inflation trend significantly exceeds expectations in October (plus additional risks arise that are not predicted by the current model), we do not rule out the possibility that the rate may need to be adjusted upwards in December," he emphasized.
The opinion of his colleagues was supported by Inna Provotar, head of the management accounting and business analysis department at OTP Bank.
"Until the end of 2024, we do not see any objective reasons to change the NBU's discount rate. Based on current forecasts, changes may occur no earlier than the end of spring next year. And this is provided that inflation can be reversed and currency stability ensured," she noted.
These expectations of bankers align with the updated forecast from July this year by the regulator, which states that the discount rate will remain at 13% per annum until the end of 2024, after which it is projected to decrease to 12.6% and 12.4% per annum in the first and second quarters of 2025, respectively, and to 11.3% per annum by the end of that year.
As reported, at the meeting on September 18, the National Bank maintained the discount rate at 13%, supported by 10 out of 11 members of the monetary policy committee (MPC), while one colleague proposed raising it to 13.5% per annum. Year-on-year inflation as of the end of September 2024 rose to 8.6% from 7.5% at the end of August, 5.4% at the end of July, and 4.8% at the end of June.