The Council of the National Bank of Ukraine (NBU) recommends the government to avoid passive debt financing of the deficit of the national budget and switch to active influence on the implementation of strategic benchmarks for development and structural modernization of the national economy.

The NBU reported on its website that the NBU Council approved the recommendation at a meeting held on October 31, 2017 after discussing the influence of the state borrowing and tax policy on the state of the monetary and credit sphere in Ukraine.

"Large volumes of state borrowing tangibly impact the situation in various economic spheres of Ukraine, including the monetary and credit sphere. The drawing up of a strategy for managing internal and external state and government-guaranteed debt is important now. The government should start switching from passive debt financing of the deficit of the budget to the active influence on the implementation of strategic benchmarks for development and structural modernization of the national economy. This would help to transforming the policy of state borrowing from a technical fiscal tool to a full-featured element of the macroeconomic policy," the press service of the regulator said, citing NBU Council Chairman Bohdan Danylyshyn.

Danylyshyn said that only with providing for a stable pace of economic growth one can restore public finances, including cut debt burden.

"I think that Ukraine is creating favorable financial and economic conditions for stirring up the economic development on the basis of an innovative model. In particular, economic growth is restoring, the banking system has accumulated large liquidity, enterprises see profits and we have a surplus of the national budget," he said.