Ms. Olena Shcherbakova, Director of the NBU General Department of Monetary Policy, participated in the public discussion on “Hryvnia before the elections: what is the best way to protect savings of ordinary citizens”, which was held on 26 July 2012.

During the course of this event, Ms. Olena Shcherbakova pointed out that the stance taken by the National Bank of Ukraine towards the currency in which savings should be kept had remained unchanged for a long time. “We recommend keeping savings in the national currency. However, one should bear in mind that any currency is associated with foreign exchange risks. When dealing with different currencies, banks hedge themselves against foreign exchange risks,” she said.

“Households should also be careful when choosing investment instruments. Today experts are providing comments on this issue. They are advising people to keep their savings in “different baskets”. I would personally call for a more cautious approach when following this advice as foreign exchange risk is inevitable. No currency is insured against losses,” added Ms. Olena Shcherbakova.  

According to the Director of the NBU General Department of Monetary Policy, the international community has been keeping an eye on the developments in the euro area trying to anticipate how the euro would behave. “We can see changes this currency has undergone over the past six months. We feel confident that under any scenario ways to get the situation back on track will be found. There is a broad set of economic factors that will cause this currency to appreciate,” said Ms. Olena Shcherbakova.

Ms. Olena Shcherbakova believes that there are pros and cons to keeping savings in US dollars as the USA has a tremendous budget and faces a huge budget deficit. The value of this currency will largely depend on the economic developments in the USA.

“We emphasize the necessity to keep savings in the national currency and support the economy. These tasks are faced by the National Bank of Ukraine and the Government. We have recently succeeded in fulfilling these tasks,” stated Ms. Olena Shcherbakova. 

The Director of the NBU General Department of Monetary Policy pointed out to the growing confidence of households in the banking system, which is reflected by the deposit growth. National currency deposits have been growing twice as fast as foreign currency ones since the start of the year, which is indicative of the increasing confidence of households in the national currency.

“Against the background of global economic uncertainty, the Ukrainian economy performs quite well, demonstrating strong economic fundamentals. Inflation has hit a record low, with GDP growing at a sustainable rate. Ukraine has succeeded in holding the Euro 2012 football championship, which boosted the image of Ukraine abroad. The issuance of euro bonds, which enabled Ukraine to raise 2 USD billion, is regarded as the successful completion of one phase and beginning of a new phase. This signifies that investors have given a positive assessment of Ukraine’s activities in external markets. The best American, Asian and Arabian investors have entered the Ukrainian market. A good investor will never enter the bad market. Investors tend to choose the market with clear rules of honest dealing and the country with a clear-cut investment policy,” concluded Ms. Olena Shcherbakova.