09:42 10.04.2020

Advisor to President's Office head proposes buying govt bonds from banks on repo transactions at low rate

2 min read
Advisor to President's Office head proposes buying govt bonds from banks on repo transactions at low rate

The advisor to the head of the Presidential Office of Ukraine on banking, a member of the supervisory board of Ukreximbank, Viktoria Strakhova, initiates a discussion on possible "quantitative easing" measures and proposes that the National Bank of Ukraine (NBU) buy government domestic loan bonds from banks under repo transactions at a very low rate.

"The only thing is that I don't want the money flowing into consumption. I am in favor of supporting businesses and large infrastructure projects creating jobs," she said on Facebook.

Among such projects, she named, as an example, road construction projects.

"And in the case of SMEs – to make credit lines with a monthly use limit," Strakhova added.

She noted that one of the reasons for initiating such a discussion is that annual inflation slowed to 2.3% in March.

She believes that the amount of quantitative support "in Ukrainian" can be calibrated.

"Here the question of surgical accuracy is needed ... Or an alternative – the NBU lowers the refinancing rate to 3%. But this is exotic," Strakhova wrote.

According to her, financing from the IMF and donors will be in Ukraine in one or two months, while support measures are needed today, as the situation is complicated and continues to deteriorate.

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