National Bank of Ukraine Focuses Solely on Inflation Control, Ignoring Other Critical Economic Issues – Expert
In recent years, Ukraine’s monetary policy has become predominantly aimed at tackling high inflation, often at the expense of other vital economic concerns.
According to Tatiana Bogdan, a doctor of economic sciences and director of scientific research at Growford Institute, the National Bank of Ukraine (NBU) is intentionally directing its efforts exclusively towards suppressing price increases, neglecting the deep-seated problems arising from such measures.
This approach has led to rising domestic interest rates, which ultimately negatively impact the stability of the national budget, credit processes, and macroeconomic indicators such as GDP growth.
Experts point out that high internal market rates increase the government’s expenditure on debt servicing, deepening the financial burdens on the country.
Data shows that expenditures on interest payments increased from 1.9% of GDP in 2021 to 3.1% in 2023, reaching 3.2% in the first half of 2025.
Analyzing yield figures, Bogdan highlights that the weighted average yield on government bonds (OVDP) in 2022 was 12.7% annually, rising to 18.7% in 2023.
In 2025, nominal yields climbed from 14.9% in January to 16.2% in July.
The real yield problem is particularly pressing; during the first year of the war, it was negative but started to rise from April 2023 onward, reaching record levels.
The maximum real interest rates were observed in March-April 2024, hitting 14% annually and creating significant financial pressure.
Although real yields gradually declined afterward, they remained positive, reaching +2% in June 2025, raising concerns about financial stability.
The expert emphasizes that unproductive government expenditures on high-yield OVDP further constrict the budget’s capacity to fund defense, social, and humanitarian programs.
This situation diminishes the country’s defense capabilities, increases human losses, and undermines long-term economic resilience.
She advocates for reforms in monetary policy and balanced solutions to promote stable and sustainable economic growth in Ukraine.