NBU needs govt support for inflation targeting
The National Bank of Ukraine (NBU) needs support of the government for implementing the inflation targeting policy.
Head of the Independent Association of Banks of Ukraine (NABU) Roman Shpek told Interfax-Ukraine that the issue was discussed at a meeting of the Expert Advisory Board of the NBU on Tuesday.
"We discussed targeting issues. Mainly there was exchange of views. Most of participants said that the problem is not in the tool, not in the absence of the high-quality economic and financial policy in the country. It is impossible that only the NBU was responsible for inflation targeting, if the targets sets by the NBU are not backed by the government. This should be reflected in the budget – budget planning and execution. This should be an element of the reforms policy. My position is that we should not speak about the tool, as the tool proved its effectiveness in many economies. We should speak about the quality and joining the monetary and credit policy and the budget policy," Shpek said.
Commenting on the recent increase in the refinancing rate by the NBU to 16%, Shpek said that the regulator had to use this tool, as the pace of reforms is not in line with the schedule.
"I think that the absence of reforms, the absence of investment results in the fact that the NBU should restrain negative processes by the rate increase tool… The problem is not in the rate, the problem is that we do not follow the way we have declared and are not in line with the reforms pace," Shpek said.