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Ukrainian Economy
Economy

NBU consolidates guiding principles of monetary policy during wartime

Author
Valery Moiseev

The National Bank Council adopted the Guiding Principles of Monetary Policy for the period of martial law that will be in effect until the normalization of the economy and the financial system.

As part of the new policy, the NBU:

  • undertakes to return to the inflation targeting regime with floating exchange rate formation as the functioning of the economy and the financial system normalizes. An important prerequisite for this is a significant increase in the scope of currency supply in the context of the production revival and resuming transport logistics. The gradual abandonment of the fixed exchange rate and the easing of restrictions will prevent the accumulation of significant macroeconomic imbalances;
  • will fund only critical government spending and seek to completely abandon this instrument as soon as possible;
  • will maintain its own institutional, financial and operational independence for the proper performance of its functions;
  • will continue supporting the stable operation of the banking system;
  • will continue to actively oppose Russian aggression on the financial front;
  • will help to address problems of Ukrainian refugees, in particular, by creating opportunities for exchanging hryvnia in cash for the currencies of their host countries;
  • will adhere to a principled position to prevent narrowing the scope of application of the hryvnia as the only legal payment instrument in Ukraine. The NBU will facilitate the development of the virtual asset market and at the same time make every effort to prevent the creation of opportunities for non-compliance with the requirements of the current state regulation, supervision and monitoring in implementing transactions with virtual assets;
  • will maintain significant engagement with the government to help raise external funding and implement reforms in Ukraine. This work can ensure the rapid post-war recovery of the country's economy.

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Tags
War in Ukraine NBU Currency regulation