If macroeconomic conditions remain favorable, interest rates on auto loans, SME financing, and mortgages in Ukraine may return to 2024 levels in the second half of 2025, with an expected decrease of approximately 1 percentage point to 17–18%.
This outlook was shared by Serhii Mamedov, Vice President of the Association of Ukrainian Banks and Chairman of the Management Board of GLOBUS BANK.
According to Mamedov, in an environment of economic growth and declining annual inflation to 9%, the National Bank of Ukraine (NBU) may adjust its monetary policy strategy. This could include lowering the key policy rate, the rate on three-month deposit certificates, and other monetary instruments by 1–1.5 percentage points before the end of the year.
“A reduction of the key rate to 14–14.5% would allow banks to actively expand various credit programs — particularly SME loans, mortgages, and auto loans — by lowering the cost of funds. Meanwhile, a decrease in the three-month deposit certificate rate to 17.5–18%, which forms the basis for most deposit yields, would likely lead to a 1–1.5 percentage point drop in interest rates on hryvnia deposits,” Mamedov projected.
The banker also emphasized that currency market dynamics in H2 2025 will reflect broader economic realities. However, he warned against placing too much confidence in exchange rate forecasts amid current geopolitical and economic uncertainty in both Ukraine and globally.
Firstly, the euro exchange rate will be influenced by global economic and geopolitical developments — including trade tensions provoked by the U.S., a temporary capital shift from the dollar to the euro, and instability in the Middle East that may have broader implications.
Secondly, Ukraine’s state budget for 2026 will be shaped by projected economic growth and the anticipated volume of international financial assistance — a figure that remains uncertain.
Thirdly, the draft 2026 state budget will include an average forecast for the U.S. dollar exchange rate, which could serve as a reference point for the FX market.
Fourthly, global military uncertainty will continue to exert pressure on exchange rates.
Fifthly, the NBU’s strategy will play a key role — the central bank is expected to maintain its mix of regulatory oversight and market-based mechanisms.
“Global currency trends have fluctuated significantly in recent months. However, Ukraine’s special FX regime has helped avoid extreme volatility in the dollar exchange rate. The euro exchange rate, meanwhile, remains largely aligned with global market pricing,” Mamedov noted.
He anticipates the official USD/UAH exchange rate may reach 43–44 UAH by year-end, representing a 2.5–5% increase between July and December. Still, the banker does not foresee any abrupt shifts in the currency market.
“The ‘managed flexibility’ exchange rate regime has proven effective during wartime, eliminating erratic or abrupt swings. Any adjustments are gradual and measured. Moreover, Ukraine’s international reserves allow for calibrated FX interventions that help balance supply and demand,” he explained.
According to Mamedov, the main factors shaping Ukraine’s banking sector in H2 2025 will include:
- A projected decline in annual inflation to around 9%;
- Economic growth, with GDP expected to increase by approximately 3% by year-end;
- The level of international financial aid — estimated at $38–40 billion annually since the onset of the full-scale war.
“In the second half of the year, the war will weigh more heavily on society than inflation or lending rates. Whether a temporary ceasefire can be achieved will directly impact the lives of hundreds of thousands of service members and millions of civilians. That’s why any discussion about the banking sector’s progress must account for wartime realities — particularly Ukraine’s effective military resistance and meaningful efforts toward lasting peace. Ultimately, a resilient banking system is the foundation for economic growth and national confidence,” Mamedov concluded.
