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Meeting with Yakiv Smolii, the Governor of National Bank of Ukraine

13/ 04/ 2018
    For the first time in 10 years, the newly appointed Governor of the National Bank of Ukraine visited Lviv to communicate with business on April 13. New strategy of the National Bank of Ukraine, crediting, current situation with the monetary restraint, credibility of banks and other topics have been discussed during the meeting with Yakiv Smolii. The most talked about topics were related to currency regulation (effect on rate exchange) and crediting. In particular, “We have a free floating currency rate”, said Yakiv Smolii. Existence of such an instrument in the hands of the National Bank today does not put one to the wall, as it was with fixed rate, but effectively influences distortion in the coordinate system. We can also expect that by maintaining such dynamics Hryvnia will be steadily strengthening. As there is no certainty in possibility of speculations on the currency market, there are no plans on substantial liberalization within the next 3-6 months. In May, significant changes are expected in the bank legislation designed to simplify life of business adopted by Vekhovna Rada, in particular – the Draft Law “On currency” No. 8152. Unfortunately, loans for business shall remain relatively expensive, as there is a huge amount of non-performing loans (56% of loans on the market are not serviced by debtors). The actual loan rate includes vital risks and account for potential high inflation; therefore, it will be within 14-15% for businesses. In respect of the role of banking sector regulator, National Bank considers optimization and balancing of loans for related parties among its main tasks. In addition, the Governor was asked about his opinion on the cryptocurrency and he stated that blockchain is good, and cryptocurrency could not be considered as means for payments, and consequently could not be regulated by the National Bank of Ukraine. Dmytro Solohub, Deputy Head of the National Bank of Ukraine, confirmed that monetary policy of our country will be harsh, that supposed to foster in reduction of inflation rate to the level of 5% (+/- 1%) by the end of 2019. We would like to thank our partners Raiffeisen Bank Aval and Advice Group for supporting this event!
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For the first time in 10 years, the newly appointed Governor of the National Bank of Ukraine visited Lviv to communicate with business on April 13. New strategy of the National Bank of Ukraine, crediting, current situation with the monetary restraint, credibility of banks and other topics have been discussed during the meeting with Yakiv Smolii.

The most talked about topics were related to currency regulation (effect on rate exchange) and crediting. In particular, “We have a free floating currency rate”, said Yakiv Smolii. Existence of such an instrument in the hands of the National Bank today does not put one to the wall, as it was with fixed rate, but effectively influences distortion in the coordinate system. We can also expect that by maintaining such dynamics Hryvnia will be steadily strengthening. As there is no certainty in possibility of speculations on the currency market, there are no plans on substantial liberalization within the next 3-6 months. In May, significant changes are expected in the bank legislation designed to simplify life of business adopted by Vekhovna Rada, in particular – the Draft Law “On currency” No. 8152.

Unfortunately, loans for business shall remain relatively expensive, as there is a huge amount of non-performing loans (56% of loans on the market are not serviced by debtors). The actual loan rate includes vital risks and account for potential high inflation; therefore, it will be within 14-15% for businesses. In respect of the role of banking sector regulator, National Bank considers optimization and balancing of loans for related parties among its main tasks.

In addition, the Governor was asked about his opinion on the cryptocurrency and he stated that blockchain is good, and cryptocurrency could not be considered as means for payments, and consequently could not be regulated by the National Bank of Ukraine.

Dmytro Solohub, Deputy Head of the National Bank of Ukraine, confirmed that monetary policy of our country will be harsh, that supposed to foster in reduction of inflation rate to the level of 5% (+/- 1%) by the end of 2019.

We would like to thank our partners Raiffeisen Bank Aval and Advice Group for supporting this event!

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