Page 50 - UKRRptJan22

8.1.4 Bank news
Ukreximbank and the EBRD will launch a new lending program for farmers. State Export-Import Bank Ukreximbank and the European Bank for Reconstruction and Development will launch a new farmer lending program. According to the Ministry of Agrarian Policy, representatives of Ukreximbank have announced a joint lending program for farmers with the EBRD, which provides for compensation of 15% for the total of the loan for the purchase of equipment to ensure the enterprises’ operation. Furthermore, it is noted that the participants of the meeting also discussed the possibilities of attracting loans under the 5-7-9 loan program for purchasing generators and other alternative sources of electricity necessary for the smooth operation of the agricultural sector.
8.2 Central Bank policy rate
The National Bank of Ukraine keeps the key policy rate at 25% on December 8. Ukraine’s central bank kept borrowing costs unchanged at 25% even as a barrage of Russian missile attacks have further imperilled the economic outlook. “An extended full-scale war by Russia and escalating terrorist attacks on the country’s critical infrastructure are the key risks for Ukraine’s economic development,” the National Bank of Ukraine said in a statement. Prices in Ukraine increased 26.6% in October, though the acceleration was less than estimated, the bank said. The central bank added that inflation will begin easing in the second quarter of next year, and well-coordinated fiscal and monetary policies will remain essential for steady deflation next year.
The National Bank of Ukraine might allow key policy rate reduction in 2023. The members of the Monetary Policy Committee of the NBU, for the fourth time in a row, unanimously spoke in favor of maintaining the discount rate at the level at 25%, while several members supported a reduction of the rate by 2-4% as soon as 2023, reported the NBU. Thus, all participants in the discussion agreed that keeping the discount rate at 25% during the last six months and fixing the official exchange rate and measures to regulate the foreign exchange market has become essential to maintaining macro-financial stability. The committee members also noted that the NBU's consistent communication regarding its steps and determination in its intentions regarding implementing a long-term, relatively tight monetary policy affected the gradual increase in bank rates for hryvnia deposits. As a result, there was a break in the trend toward a decrease in the share of time deposits by consumers. The effects of the June increase in the discount rate have not yet been exhausted, and there is still considerable room for further transmission to market rates.
50 UKRAINE Country Report January 2023 www.intellinews.com