NBU approves currency restriction easing strategy
It is noted that this serves as a structural beacon within the Extended Fund Facility programme with the IMF
The Board of the National Bank of Ukraine (NBU) has approved a strategy for easing currency restrictions, transitioning to a more flexible exchange rate, and returning to inflation targeting.
This is stated on the NBU website.
"The development of the strategy is one of the structural beacons within the Extended Fund Facility programme with the International Monetary Fund, the implementation of which was expected by the end of June 2023," the regulator notes.
As reported by the NBU, the development and implementation of the strategy are also aimed at fulfilling the provisions of the main principles of monetary policy during the state of war, approved by the NBU Council in April 2022. It is noted that they envisage a return to inflation targeting, which will allow the National Bank to achieve price and financial stability and sustainable economic growth in the long term.
The regulator clarified that the relevant strategy consists of three main directions: easing of currency restrictions, transition to greater exchange rate flexibility, and return to the principles of inflation targeting.
It is clarified that during the implementation of the strategy, the National Bank will take into account the results of the analysis of previous steps and the potential impact of changes on various directions and other aspects of macroeconomic policy, including fiscal position and debt stability.
In addition, the regulator will maintain stringent monetary conditions, supporting a sufficiently high level of interest rates in real terms. "This will ensure high attractiveness of hryvnia assets and thus enable to minimise risks for exchange rate stability," adds the NBU.
Background. Mind previously reported that the NBU plans to update the Financial Sector Development Strategy by the end of June.
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