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Members of NBU monetary policy committee unanimously support maintaining key policy rate at 25%
KYIV. Feb 7 (Interfax-Ukraine) – All members of the monetary policy committee of the National Bank of Ukraine (NBU) supported keeping the key policy rate at 25% on January 25, according to the NBU website.
"Members of the committee for the fifth time in a row unanimously spoke in favor of maintaining the rate at the level of 25%. According to them, in the current conditions, maintaining the rate at 25% is the best solution in terms of ensuring exchange rate stability and the return of inflation and expectations of a sustainable decline trajectory," the press release says.
They believe that such a decision takes into account the balance of risks over the forecast horizon, including the uncertainty and challenges that may be generated by a possible intensification of hostilities.
In addition, keeping the key policy rate is consistent with the previous communication of the NBU and is in line with market expectations.
One of the members of the committee stressed that this decision is fully correlated with the obligation stipulated by the memorandum with the IMF, in terms of continuing monetary policy aimed at easing price pressure and increasing the attractiveness of hryvnia assets.
In addition, the members of the committee unanimously spoke in favor of holding the second stage of raising the required reserve ratios, which was announced in December 2022, in particular, raising the standards by 5 percentage points for funds on demand and funds on current accounts of legal entities and individuals from February 11, an additional increase by 10 percentage points of the required reserve ratios for funds on demand and cash on current accounts of individuals in both national and foreign currencies from March 11.
One of the members stressed that this decision takes into account the need to reduce the liquidity surplus without creating threats to the stability of the domestic market for government borrowings. In his opinion, current decisions on mandatory reserves are designed in such a way that even despite the extraction of part of the liquidity, it will be enough to maintain the ability of banks to actively participate in government auctions for the placement of government bonds.
