Ukraine’s headline inflation rate declined to 5.1% YoY in November, almost reaching the central bank’s (NBU) target of 5%. Core inflation also decreased to 5.7%. This faster-than-expected disinflation and a favorable balance-of-payments outlook enabled the NBU to reduce its policy rate from 25.0% in July to 16.0% in October and shift from a currency peg to a managed flexible exchange rate. However, the NBU’s stance has turned hawkish, focusing on liberalizing FX restrictions rather than further rate cuts. Meanwhile, President Zelensky visited Argentina to garner support.