Ukrainian central bank hikes rates and warns of rising financial risks

NBU says fall in yields on hryvnia-denominated assets may lead to dollarisation

The National Bank of Ukraine
The National Bank of Ukraine
Oksana Parafeniuk

Ukraine’s central bank more than doubled its policy rate on June 2, warning that falling demand for the country’s currency could lead to dollarisation.

The National Bank of Ukraine’s board hiked the rate by 1,500 basis points from 10% to 25%. This was its first raise since January 20, when the rate rose by 100bp.

As the war caused by the Russian invasion entered its fourth month, the NBU warned of the risks caused by weak demand for hryvnia-denominated assets. “Although Ukraine’s international

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