Chairman of the National Bank of Ukraine Yakov Smoliy does not exclude that the regulator may further reduce the discount rate by the end of this year. “To stimulate the economy, we will probably be able to further lower the discount rate this year. There is room for that.
Through our balanced monetary policy, we have ensured price stability for years in a row, as required by our mandate. That is, stable low inflation, which will remain within our target of 5% plus or minus a percentage point, ”said Yakov Smoliy. He added that the NBU “looks to the future with cautious optimism.”
“You shouldn’t have illusions, the level of uncertainty is higher than ever. Our macro forecasts are based on the fact that the quarantine will end in the second quarter, and there will be no need to return to it. But if not? If there is a second wave of a pandemic in the world? Should we need to return to quarantine measures over and over again? Today, no one in the world will give you unambiguous answers to these questions.
Therefore, we at the National Bank are prepared to respond quickly and efficiently to new challenges if necessary. We constantly monitor the situation, assess the risks, check our forecasts for realism, ”Smoliy said. The last time the National Bank of Ukraine cut the discount rate on April 23 from 10 to 8%.
Earlier, the regulator announced that during the year the National Bank plans to reduce the discount rate to 7%. The discount rate is one of the tools by which the National Bank sets a benchmark for commercial banks on the cost of loans and deposits.