Refinancing rate should be kept at minimum positive level compared to inflation, NBU head says

The National Bank of Ukraine (NBU) is intending to promote a reduction of the cost of borrowing, as this would stabilize the macroeconomic situation and bolster the flow of deposits to the banking system, NBU Governor Serhiy Arbuzov has said.

"In these circumstances, the refinancing rate should be kept at the minimum positive level with respect to the forecast level of inflation. This will encourage the market to reduce the cost of borrowing in line with the decrease in inflationary pressure," he said in an interview with Interfax-Ukraine.

According to him, the exact size of the discount rate and refinancing rates will depend on the situation in the economy and on the monetary and credit markets, as well as the forecast for their development.

"Speaking about refinancing instruments, there is no need to change anything here. The National Bank offers a full range of liquidity regulatory instruments [such as those] used by central banks in the most developed countries of the world," said Arbuzov.