11:19 05.12.2016

NBU publishes board's 2017-2019 monetary and credit policy proposals to NBU Council

2 min read
NBU publishes board's 2017-2019 monetary and credit policy proposals to NBU Council

The National Bank of Ukraine (NBU) has published proposals of the board to the NBU Council. They concern designing of the monetary and credit policy for 2017 and medium-term outlook. The Council intends to approve them on December 21.

The document approved by NBU Board on November 23 has been posted on the official website of the regulator late on December 2.

According to the proposals, the NBU intends to use inflation targeting principles in the monetary and credit policy, as it is the most favorable mode to retain low consumer prices.

According to the document, by late 2017 inflation would fall to 8% (plus/minus 2%), by late 2018 - to 6% (plus/minus 2%), then inflation would be retained at 5% (plus/minus 1%) in long-term outlook starting late 2019.

The inflation target will be achieved thanks to changing the refinancing rate. The NBU would stick to the floating exchange rate without setting the exchange rate range. If it is required the NBU would enter the currency market aiming at replenishing forex reserves or preventing extra exchange rate fluctuations. The NBU would gradually weaken administrative measures restricting exchange rate flexibility.

The central bank would not use monetary and credit policy tools to achieve goals threatening price stability.

The NBU seeks to promote the creation of conditions for stepping up bank crediting, first of all, thanks to initiatives to strengthen the banking sector and enhance protection of creditors.

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