The monetary policy committee of the National Bank of Ukraine (NBU) at a meeting on December 12 unanimously noted the weakening of inflation risks and availability of signs of improvement of inflation expectations.

According to the minutes of the meeting posted on the website of the central bank's website, a record hitting grain and oilseed harvest, the quick decline in global energy prices, the moderate fiscal policy of the government, the improvement of external environment for developing countries and the favorable situation on the currency market contributed to the reduction of inflation risks.

The committee members also pointed out the implementation of the key element of the NBU's macroeconomic forecast issued in October: the achievement of the tangible progress in cooperation of Ukraine with the International Monetary Fund (IMF) under the new Stand-By Arrangement (SBA) and the attraction of financing from other official creditors.

Almost all members of the committee believe that risks of inflation pressure remain large, and this requires retaining tough monetary policy.

Explaining their positions, these committee members pointed out the worsening of expectations against a background of the new political cycle, the implementation of geopolitical risks, in particular, escalation of the conflict in the Sea of Azov, the increased pressure on prices from large consumer demand and cooling of the global economy.

The committee members also said that in the future, the reduction of the refinancing rate is possible only if the risks significantly weaken.