Page 56 - UKRRptAug20

In the latest move against reformers at the central bank, the National Bank of Ukraine Council decided not to renew the contract of Deputy Governor Oleh Churiy​. The announcement was made by Council Chair Bohdan Danylyshyn, who seeks to be nominated Governor.
Kateryna Rozhkova, now acting central bank governor, warned June 6 about “red lines,”​ especially the bank’s independence and “the right of the National Bank to make decisions regardless of political wishes, but only with the aim of maintaining macro-financial stability.” She told reporters: “It’s also inadmissible to turn on the printing press, inadmissible to return bankrupt banks to their former owners.”
Ukrainian state bank PrivatBank was ranked among the 500 world's best banks​, according to the rating published by the British The Banker magazine. The bank has jumped 262 positions in 2020 and occupied 446th place, which shows the increase of its capital and efficiency. This is the only Ukrainian bank that has been ranked among the 500 best banks in the world.
8.2 ​Central Bank policy rate
Ukraine unexpectedly paused a more than year-long monetary-easing campaign ​in July keeping rates on hold after the central bank governor surprisingly resigned in a protest against systematic political pressure.
The central bank kept benchmark borrowing costs unchanged at 6% after cutting them for eight straight meetings and nine times since March of last year. Economists were split over the path of interest rates in a Bloomberg survey, with most of them expecting a rate reduction of varying magnitude.
Justifying the 6% rate, the central bank predicts inflation is growing again and will hit 4.7% at the end of this year. It says inflation will be driven by higher energy prices and “soft monetary and fiscal policies that will mitigate the negative effects of COVID-19 and support consumer demand and business activity.” Later deputy bank governor Dmitry Sologub told reporters: “If we see that inflation is in the target range, we do not see a significant expansion of the fiscal deficit, and we also see continued cooperation with donors, then I do not rule out a decrease in the interest rate.”
Ex-Governor Yakiv Smoliy’s exit raised concerns over the bank’s independence, which is crucial for Ukraine to receive billions of dollars in aid from lenders including the International Monetary Fund. It spooked investors already wary of a virus-hit economy that’s seen contracting more than 8% this year.
“Keeping the rate at 6%, the National Bank of Ukraine leaves enough room for monetary stimulus in order to provide the economy with additional impetus for growth if consumer and investment demand recover more slowly than expected,” the central bank said in a statement.
While previously having won plaudits for its independence and opposition to quantitative easing, the central bank has drawn repeated criticism from the current government and President Volodymyr Zelenskiy for slashing borrowing costs at too slow a pace and keeping the currency too strong, damaging
56​ UKRAINE Country Report​ August 2020 ​ ​www.intellinews.com