The National Bank of Ukraine has no plans to change the exchange rate policy because of almost zero inflation, the head of the National Bank Serhiy Arbuzov said in his interview with Boomberg.
"Almost-zero inflation gives us no reason to change our exchange-rate policy immediately. Still, a gradual move toward a flexible exchange rate is set out in our IMF program," he said.
The NBU head added that such a shift must be "accompanied by a recovery in Ukraine’s financial system."
"If the inflation situation remains favorable, and if there is no danger to the stability of the hryvnia, the central bank will keep monetary stimulus. This can be done by reducing interest rates, as well as further reduction of reserve requirements," Arbuzov said.
Answering the question on the reduction of the gold reserves of Ukraine, the head of the NBU said: "The recent decline in reserves was caused by foreign-debt repayments, not by Ukraine’s economic situation worsening."
While reserves shrank 4.7 percent to $29.3 billion in June, the lowest level in two years, the drop was mainly because Ukraine repaid $600 million of Eurobonds and $1.1 billion loaned to it by Russia’s VTB Group, Arbuzov specified.
"Almost-zero inflation gives us no reason to change our exchange-rate policy immediately. Still, a gradual move toward a flexible exchange rate is set out in our IMF program," he said.
The NBU head added that such a shift must be "accompanied by a recovery in Ukraine’s financial system."
"If the inflation situation remains favorable, and if there is no danger to the stability of the hryvnia, the central bank will keep monetary stimulus. This can be done by reducing interest rates, as well as further reduction of reserve requirements," Arbuzov said.
Answering the question on the reduction of the gold reserves of Ukraine, the head of the NBU said: "The recent decline in reserves was caused by foreign-debt repayments, not by Ukraine’s economic situation worsening."
While reserves shrank 4.7 percent to $29.3 billion in June, the lowest level in two years, the drop was mainly because Ukraine repaid $600 million of Eurobonds and $1.1 billion loaned to it by Russia’s VTB Group, Arbuzov specified.
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