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Monetary policy

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The primary objective of monetary policy, as defined by the Law of Ukraine On the National Bank of Ukraine”, is to achieve and maintain price stability in the country.

 

In order to achieve and maintain price stability, the National Bank of Ukraine operates under the Inflation targeting framework. The monetary policy objectives and tasks are specified in the Monetary Policy Guidelines and Monetary Policy Strategy.

 

The medium-term inflation target has been set at 5% ± 1 ppt (for an annual change in the CPI) and will be achieved gradually. 

 

The main principles of the monetary policy framework are:

 

• achieving and maintaining price stability in the country is the priority

• floating exchange rate

• forward-looking decision making

• transparency of the activities of the National Bank of Ukraine

• institutional, financial and operational independence of the National Bank of Ukraine

 

Certain commitments of the National Bank of Ukraine regarding the implementation of monetary policy are set forth in the IMF-supported program.

 

In order to achieve and maintain price stability, the National Bank of Ukraine uses available monetary instruments. The main monetary policy instrument is the key policy rate.

 

Monetary policy decisions are taken by the NBU Board at the NBU Board meetings on monetary policy issues that are held on a pre-announced schedule.

 

A significant portion of the information that the NBU Board considers in its monetary policy decision-making is published on a quarterly basis in the Inflation Report.

 

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