If the cash rate were 3 percentage points higher, the whole structure of funding costs for the banking system would shift up by around the same amount. This effect of the cash rate on the cost of banks’ funding translates into a large effect on the structure of lending rates for both households and businesses.
The NBU’s baseline scenario envisages the key policy rate to decrease further, to 8% over  the coming years, provided that inflation steadily declines to the 5% target.