The impact of the interest rate policy on the state of the monetary and credit market is falling, which makes the National Bank of Ukraine (NBU) to focus on the quantitative parameters of cash supply, according to Kyiv Post.

“The use of interest rate policy instruments today does not give a chance to substantially impact on the state of the monetary and credit market… In the present conditions, NBU focuses on the quantitative parameters of cash supply and not on the indicators of money value during the implementation of functions on provision hryvnia stability,” reads a posting on the NBU’s Web site.

The NBU said that the interest rate policy could be efficient only if there is the efficient stock market, which was the key link of signal transmission from the rate changes done by the central bank to real changes in the economic behavior of market players.

“At present, the stock market does not form fair price of financial assets, and the use of interest rate instruments of the monetary policy is complicated,” the central bank said.


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