General economic environment
In May, active hostilities in the Strait of Hormuz subsided, which had a positive impact on global energy markets. In particular, the price of Brent crude oil declined from USD 114.8 to USD 91.1 per barrel. The decrease in energy prices significantly eased inflationary pressure and supported expectations that the downward inflation trend will persist through the end of the year.
Under these conditions, the National Bank of Ukraine continues to pursue a cautious monetary policy and forecasts annual inflation at 9.4% in 2026, preventing it from exceeding 10%. At the upcoming Monetary Policy Committee meeting in June, the regulator is expected to keep the key policy rate unchanged at 15%.
In May, yields on hryvnia-denominated domestic government bonds (OVDPs) at primary auctions remained unchanged:
- 1 year — 15.15%
- 2 years — 15.85%
- 3 years — 16.15%
Interest rates on term deposits in the banking sector remained at April levels, ranging between 9% and 14% in hryvnia. Yields on U.S. dollar deposits were also unchanged, at up to 2% depending on maturity.
In May, the Ministry of Finance of Ukraine continued issuing foreign-currency OVDPs on the primary market with yields of 3.05–3.15% in U.S. dollars. On the secondary market, yields on foreign-currency OVDPs did not exceed 2.25% in U.S. dollars and 0.75% in euros.
Foreign exchange market
In May, demand for foreign currency exceeded supply, leading to a moderate depreciation of the hryvnia—from UAH 43.90 to UAH 44.30 per U.S. dollar. The volume of foreign exchange interventions by the National Bank of Ukraine decreased by 11% month-on-month, from USD 3.6 billion to USD 3.2 billion.
Stabilization of the exchange rate within the range of UAH 43.75–44.50 per U.S. dollar is expected in the second quarter of 2026.
External markets and eurobonds
The unblocking of the European Union’s decision to provide Ukraine with a “reparations loan,” along with the change of president in Hungary, significantly increased the attractiveness of Ukrainian debt instruments. Against this backdrop, prices of Ukrainian eurobonds rose by 11–12.3%, depending on maturity.
