Ukrainian inflation in 2014 could speed up to 17-19% due to the hryvnia devaluation and the rise in regulated tariffs, said Valeriya Gontareva, the head of the National Bank of Ukraine (NBU).

The NBU is switching to flexible exchange rates with inflation targeting, a policy that is new for the country, she said via video link at an investment conference in London organized by Concord Capital, an investment firm.

At the same time, Gontareva said that flexible-rate policy should not be confused with hryvnia's real convertibility, the prospect of which is measured by years, and the transition to the inflation-targeting policy will be gradual, taking approximately 12 months.

The fixed-rate policy pursued earlier led to periods of sharp devaluation of the national currency, said the National Bank chief. She also said that the advantages gained by exporters at the expense of the latest hryvnia devaluation will be decreased by inflation growth, so they should not be overestimated.

Ukrainian inflation in May sped up to 3.8% compared to 3.3% in April, 2.2% in March and 0.6% in February. Domestic consumer prices have risen by 10.5% since the beginning of this year, whereas the figure for the whole of 2013 was 0.5%. The 2014 national budget was built on the 14% inflation target.

The program of Ukraine's cooperation with the International Monetary Fund approved in late April involves a 12-month transition to the inflation-targeting policy aimed at reaching an inflation target of 3-5% per year.