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crediting.
The Council of the National Bank of Ukraine (NBU) announced on September 10 the approval of its "Basic Principles of Monetary Policy for 2021 and the Mid-Term," which had been submitted by NBU Board. The document is based on the NBU Board's official Monetary Policy Strategy approved in 2018.
The document states that the NBU will continue its policy of inflation-targeting with a target rate of 5% +/- 1pp, which involves maintaining a flexible exchange rate regime without requiring a specific level. The document also notes that the NBU might allow for short-term deviations of consumer inflation beyond the mentioned range in order “to avoid losses in economic development."
The development of crediting will be a special focus of monetary policy, according to the document. The predictability of inflation, combined with comprehensive monetary policy, will be the basis for the development of the financial system and the accumulation of short-term and long-term resources available for lending.
NBU Governor Kyrylo Shevchenko emphasized that “the National Bank has set ambitious objectives of not only maintaining a moderate pace of price growth, but also of reviving lending ... for the development of the real sector of the economy.”
Evgeniya Akhtyrko: Overall, the new document reinstates the principles of monetary policy developed and maintained by the NBU after having adopted its inflation-targeting policy in 2015. Importantly, it keeps unchanged the inflation target range of 4-6% and rules out fixating the exchange rate.
The document also reflects the aspirations of the current power brokers in pursuing the goal of increasing the availability of credit resources for reviving the economy.
58​ UKRAINE Country Report​ October 2020 ​ ​www.intellinews.com