Page 50 - UKRRptJan22

Furthermore, the Law on the State Budget for the current year stipulates that relevant state guarantees in the amount of up to UAH10bn ($370mn) may be provided to ensure partial fulfillment of debt obligations on the portfolio of bank loans provided to micro, small and medium enterprises - residents of Ukraine.
The Ukrainian subsidiary of the Russian Sberbank has changed its name to MR Bank. Sberbank decided to change the name of its subsidiary "Sberbank" (Kyiv) into "MR Bank", due to a decision of Sberbank of Russia dated September 27, which was published on its website. The shareholder also authorised the bank's board to independently decide on the procedure and terms of using new marks for goods and services.
8.2 Central Bank policy rate
The National Bank of Ukraine (NBU) hiked rates by 50bp on December 9 to bring the prime rate to 9% as it continues to fight stubbornly high inflation.
"The Board of the National Bank of Ukraine has decided to raise the key policy rate to 9% per annum. The decision is aimed at neutralizing the impact of additional pro-inflationary risks, improving inflation expectations, and ensuring steady disinflation toward the target of 5%," the regulator said as cited by Interfax Ukraine.
Inflation has surged in the last year and a half after it fell to a post-Soviet record low of 1.7% in May 2020, but as the country began to recover form the coronacrisis prices swelled, largely driven by rising food prices and effects from the distribution to supply chains.
The NBU was the first central bank to move early in 2021 with a rate hike to try and head off more price increases but the hikes were unsuccessful, setting off a string of hikes that was soon copied by other central banks in the region. The NBU rate hike included: March (50bp), April (100bp), flat in June, July (100bp) and September (50bp).
However, the rate increases seem to be finally having an effect. Inflation peaked at 11% in September and has fallen in the last two months to the current rate of 10.3%. Inflation is expected to continue to fall in 2022 as the economies of the world finally rebalance and some sort of normalcy returns.
In its statement the NBU said it stands ready to make more rate hikes if pro-inflationary forces persist.
In addition the NBU also said the following in its statement:
“Additional pro-inflationary risks are also materializing. Rising geopolitical tensions are affecting prices of Ukrainian assets and FX market conditions. Considering the current situation, global natural gas and food prices are likely going to be higher than expected. Global inflation continues to accelerate, prompting leading central banks to step up their monetary policy tightening. In turn, this lowers investor interest in assets of emerging markets.
Food inflation will decelerate due to both large harvests gathered this
50 UKRAINE Country Report January 2022 www.intellinews.com