On December 25, the first meeting of the Monetary Policy Committee (MPC) took place. At the first meeting the MPC considered and agreed forecast for the real economy, balance of payments and monetary indicators, targets of monetary policy for 2015 and outlined the main features of the new operating structure of the NBU interest rate policy.

The MPC is established by the National Bank of Ukraine under transformation process aimed to increase the NBU’s institutional competence and gradual transition to the inflation targeting.

“The establishment of such body is explained by the need of systematization of decision taking and improving communication with the public on the relevant determinants of such decisions”, explained Governor of the National Bank of Ukraine Valeria Gontareva.

The MPC is a collegial body responsible for development of proposals for the formulation and implementation of monetary policy to be submitted for approval to the National Bank Board. It is planned to make amendments to legislation for the Board to delegate those functions directly to the MPC.

The MPC will focus on identifying changes in the parameters of monetary instruments and their alignment with monetary policy objectives of the NBU. In particular, the MPC will analyze the situation in financial markets, macroeconomic indicators and results of forecast scenarios and develop proposals on:

• setting and changing the discount and other interest rates of the NBU;
• parameters of operations with assets and liabilities for the purpose of banking system liquidity regulation;
• defining and implementing the exchange rate policy;
• amount and procedure of formation of the banks’ obligatory reserves;
• monetary and fiscal policies coordination.

The MPC will be chaired by the NBU Governor. The NBU’s experts in the field of monetary policy formulation and implementation, macroeconomic forecasting, financial stability and prudential supervision will be the members of the MPC.

The MPC operating procedures provide for a possibility to convene an extraordinary session, if necessary.

In 2015, the MPC meetings will be held on a monthly basis.