AUB News

Under favorable economic conditions in the second half of the year, interest rates on car loans, loans for small and medium-sized businesses, and mortgages may return to 2024 levels: they are expected to decrease by an average of 1 percentage point to 17–18%. This opinion was expressed by Serhiy Mamedov, Vice President of the Association of Ukrainian Banks and Chairman of the Board of GLOBUS BANK.

The banker believes that in the context of economic development and a decline in inflation to 9% on an annual basis, the National Bank of Ukraine may revise its monetary strategy: it is possible that by the end of the year, the regulator will lower the discount rate, the rate on three-month deposit certificates, and other monetary instruments by 1–1.5 percentage points.

“Lowering the discount rate to 14–14.5% will enable banks to more actively develop various loan programs—primarily loans for small and medium-sized businesses, mortgages, and car loans—as the cost of funds raised for loan programs will decrease. At the same time, we do not rule out that the reduction of the rate on three-month deposit certificates to 17.5–18%, on which the profitability of most deposit programs is based, will affect the profitability of hryvnia deposits: rates may decrease by an average of 1–1.5 percentage points," the banker predicts.

The head of GLOBUS BANK emphasized that in the second half of the year, the situation on the currency market will develop in line with economic realities. At the same time, he believes that currently no exchange rate forecasts can take into account the current military and economic circumstances, both in Ukraine and worldwide, so forecasts of the exchange rates of major currencies should be treated with caution.

Firstly, this concerns the euro exchange rate, which depends on global economic and geopolitical processes: customs “flames” provoked by the US, the temporary “rescue” flight of large investors from the dollar to the euro and other European currencies, the situation in the Middle East with possible consequences for the world order, etc. However, according to the expert, the “Ukrainian” euro exchange rate corresponds to global dollar/euro trading.

Secondly, in the second half of the year, the budget will be formed taking into account economic growth rates and expected volumes of international financial support, the amount of which in 2026 is currently unknown.

Thirdly, the draft state budget will include an average dollar exchange rate for 2026, which may serve as a benchmark for the currency market to some extent.

Fourth, exchange rates will be pressured by the global factor of military uncertainty.

Fifth, the National Bank's strategy will be important for the formation of exchange rate indicators: it is expected that the regulator will continue to combine elements of regulation and the free market.

“Over the past few months, currency trends in global markets have changed repeatedly. However, thanks to Ukraine’s special currency regime, we have not seen any significant declines or rapid growth in the dollar exchange rate. Instead, the euro exchange rate will remain commensurate with the global value of this currency,” believes Serhiy Mamedov.

According to his expectations, by the end of the year, the official US dollar exchange rate may reach 43–44 UAH. That is, from July to December, the official dollar exchange rate may increase by an average of 2.5–5%. At the same time, the expert rules out sharp changes in the currency market.

"The ‘managed flexibility’ regime in wartime is fully justified: there are no chaotic or ‘arrhythmic’ fluctuations in the market. Any exchange rate correction occurs gradually, without sudden jumps or crashes. In addition, international currency reserves make it possible to adjust the volume of currency interventions, balancing supply and demand as much as possible," the banker emphasized.

In general, in his opinion, the main factors that will influence the development of the banking sector in the second half of the year will be:

•  an expected decline in inflation to 9% on an annualized basis;
• economic growth — by the end of 2025, the country's GDP may increase by an average of 3%;
• the volume of international financial support — since the start of the full-scale invasion, Ukraine's annual need for external financial assistance is estimated at $38–40 billion.

“In the second half of the year, society will perceive the war as a greater challenge than inflation or interest rates on loans. After all, the fate of hundreds of thousands of soldiers and millions of our citizens depends on whether at least a short-term ceasefire can be achieved. That is why any discussion of progress in the banking sector must take into account the circumstances of war — first and foremost, effective resistance to the enemy army and real, rather than declarative, efforts to achieve lasting peace. At the same time, the stability of banks is the foundation of economic development and confidence in the future of the state," concluded Serhiy Mamedov.