Ukraine's govt initiates discussion with NBU – minister
The Cabinet of Ministers of Ukraine will begin a discussion with the National Bank of Ukraine (NBU) on closer coordination of policies, First Deputy Prime Minister, Minister of Economy Oleksiy Liubchenko has said in an exclusive interview with Interfax-Ukraine.
"We will start it [the discussion]. The Prime Minister has already expressed the wish before the governor of the NBU. I hope it will take place regarding the role and place of each institution in this country. This applies not only to the NBU, but also to the National Securities and Stock Market Commission," Liubchenko said.
According to him, the National Bank conducts a competent policy in curbing inflation. However, the increase in the key policy rate is excessive, since the causes of inflation are not associated with monetary factors.
"The NBU is conducting a competent policy in this [curbing inflation], but we must agree on it together so that it is consistent with the goals of the Strategy of Ukraine 2030 on GDP growth. This means that a balance should be sought between lending, inflation and the development of the real economic sector," the first deputy prime minister said.
Liubchenko said that it is important that wages grow faster than inflation, and inflation is predictable.
He also expressed the hope that stock instruments will soon appear in Ukraine to strengthen the economy, since now the transmission of monetary policy in Ukraine is limited and it is operating in a single-channel mode – through the foreign exchange market.
"There is practically no stock market, bank lending is in stagnation. We do not hear about factoring. If these financial instruments have worked, there would have been no problems with the effective circulation of money in Ukraine, and the National Bank would have conducted a different monetary policy," Liubchenko said.
In his opinion, it is necessary to breathe new content into the Financial Stability Council, which unites for coordination the National Bank, the National Securities and Stock Market Commission, the Ministry of Finance and the Deposit Guarantee Fund.