Following the 2014 revolution in Ukraine the country is
firmly on the path of reform, in line with our European
integration ambitions as a prerequisite of long-term economic
growth. The National Bank of Ukraine (NBU) is committed to
supporting this by proving its mandate as an independent
central bank and by delivering price and financial
Ukraine is going through its third year of inflation
targeting and has proved that it works under not only
favourable conditions, but also when a central bank has to take
unpopular measures, such as a tighter monetary stance. Headline
inflation hit 13.7% in 2017, but we are confident that our move
towards tighter monetary policy will bring it back to the
target range (5.0% ± 1 pp) in 2019.
The NBU remains committed to a floating exchange rate. With
benign external market conditions, macroeconomic recovery and
support from IFIs, the NBU managed to increase international
reserves to pre-crisis level, while preventing pressure on the
These macroeconomic conditions have also been conducive to
the stable and profitable operation of the banking sector.
Hryvnia deposits continue to grow. The rate of growth in retail
lending has increased to 40%. However, renewal of corporate
lending requires better protection of creditors' rights and
solving toxic assets problem.
Since the economy is growing, inflation is going down and
the banking sector is healthy, the NBU has set its sights on
creating a favourable environment for all market players. For a
quarter of a century, the Ukrainian economy has functioned
according to restrictive FX legislation that discourage foreign
investors and the development of domestic business. It is time
to get the long-awaited freedom for FX operations in Ukraine.
In June 2018, the parliament adopted new Law on Currency and
Currency Operations, drafted by the NBU. It will be implemented
in February 2019 and in a few months, Ukraine will become much
However, free movement of capital increases exposure to
unpredictable shocks that can cause capital flight and threaten
financial stability. Thus, the next step should be the
introduction of tax regulation based on the implementation of
the Action Plan on BEPS and integration into the global system
of automatic exchange of tax and financial information.
Overall, the NBU has a clear strategic vision and a
well-defined program for the coming years. In March 2018 for
the first time, we presented a central bank strategy, with
seven goals to achieve. Apart from maintaining low and stable
inflation and ensuring a stable and efficient banking system,
we will keep moving towards consolidated supervision of the
entire financial sector.
The NBU has set an ambitious task in promoting financial
inclusion. We must be proactive in facilitating the development
of technologies intended to broaden financial services
penetration, ensuring protection of the rights of its
customers, and promoting financial literacy. It will make the
financial sector more stable, improve quality of financial
services and, together with the rest of the NBU's strategic
goals, help to deliver the proper conditions for Ukraine's
sustainable development in the future.