This decision aims to maintain the stability of the currency market, keep inflation expectations in check, reverse the inflation trend, and gradually slow down inflation to the target of 5%. Containing price pressure will likely require further tightening of monetary policy.
In December 2024, inflation accelerated to 12% year-on-year, exceeding the previous forecast by the NBU. According to NBU estimates, the acceleration of inflation continued into January.
The high rates of consumer price growth were largely driven by temporary factors, primarily linked to the effects of the poor harvests from the previous year. At the same time, fundamental price pressures were also intensifying. This is evidenced by the further acceleration of core inflation (up to 10.7% year-on-year in December), particularly due to the rapid rise in service prices (12.5% year-on-year in December). This price dynamic is attributed to increased business costs for raw materials, supplies, and electricity, as well as rising wages amid a persistent labor shortage.
Concurrently, in recent months, price growth has been somewhat restrained by the strengthening of the hryvnia against the euro, which is significant for Ukrainian imports.