Today, the senior management team of the regulator held an informal meeting with the senior officials of the Ministry of Economic Development and Trade of Ukraine.
The business breakfast was attended, on the side of the National Bank of Ukraine by Governor of the National Bank of Ukraine Valeria Gontareva, her First Deputy Governor Oleksandr Pysaruk, and Deputy Governors Vladyslav Rashkovan, Yakiv Smolii, and Oleh Churii. The Ministry of Economic Development and Trade of Ukraine was represented at the meeting by Ukraine's Economy Minister Aivaras Abromavičius, First Deputy Minister Julia Kovaliv, and Deputy Ministers Julia Klymenko, Natalia Mykolska, Maksym Nefiodov, and Ruslan Korzh, Senior Advisor to the Minister of Economy Adomas Audickas, Director of Foreign Economic Activity Department Denys Gutenko, and Head of the Executive Support Service Natalia Best.
“It is very important for us to forge fruitful cooperation with the Ministry of Economic Development to join our efforts to determine the main reasons behind the economic downturn and find the drivers for economic growth,” said the Governor of the National Bank of Ukraine.
Valeria Gontareva introduced a new composition of the Board of the National Bank of Ukraine, and told her colleagues from the Ministry that the main task of the regulator is to ensure the price stability in the country and strengthen the institutional independence of the National Bank of Ukraine, which is now legally guaranteed by the recently adopted amendments to the Law of Ukraine On the National Bank.
The Governor of the National Bank briefed her colleagues from the Ministry of Economic Development on the progress made in reforming the banking system, changes in the decision-making process as to the preparation and approval of managerial decisions as well as the transformation process the National Bank is going through in line with best international practices.
“Joint efforts by the regulator and the Ministry of Economic Development and Trade of Ukraine are crucial for the fast recovery of the efficient financial market in Ukraine. This meeting marks an important step forward towards forging practical business ties in the priority reform areas. This will improve cooperation between our agencies at all levels,” said the Minister of Economic Development and Trade of Ukraine.
First Deputy Governor Oleksandr Pysaruk dwelled on the banking system reform agenda and cited the lack of protection of the creditors’ rights, absence judiciary reform, the undercapitalization of the banking sector and weak demand for business lending as the main impediments to the resumption of more robust lending activity in the country.
Dmytro Sologub briefed the meeting participants about the measures to ensure the macroeconomic stability in the country. Among other things, he unveiled a new monetary strategy of the National Bank of Ukraine, which is based on the gradual transition to inflation targeting. “The priority of the NBU’s monetary policy will be the price stability and the regulator is set to bring down the annual rate of inflation to 4 – 6% within three-four years,” said Dmytro Sologub.
The independent assessment of the current economic situation and the forecasts of the basic macroeconomic indicators are crucial to the proper planning of Ukraine's economic development and the NBU’s monetary policy. Therefore, the meeting participants agreed on the exchange of statistical information and concurred to maintain close interaction in the area of macroeconomic forecasting. Another issue that was raised at the meeting was the lifting of the additional import surcharge levied on goods imported to Ukraine and the impact that this move would have on the country’s balance of payments.
In their turn, the representatives from the Ministry of Economic Development informed their colleagues from the National Bank of Ukraine about what has been done to deliver deregualtion, improve the corporate governance in state-owned enterprises, and stimulate exports and import substitution.
The representatives from the Ministry of Economic Development told their colleagues from the NBU about the complaints filed by the importers who complained about the requirement imposed by the National Bank of Ukraine obliging them to obtain certificates from the Tax Service and submit them to the NBU. In addition, they said that exporters are not happy about the mandatory sale of 75% of fx proceeds (a surrender requirement obliging exporters to sell 75% of their fx proceeds). The meeting participants decided to nominate the representative from the Ministry of Economic Development to the Working Group on foreign exchange liberalization, which had been established at the National Bank of Ukraine.
The business breakfast participants agreed to meet on a regular basis. The Governor of the National Bank of Ukraine came up with a proposal to invite to the next meeting representatives from the Ministry of Energy and Coal Industry of Ukraine and Naftogaz of Ukraine NJSC to discuss the upcoming comprehensive energy sector reform agenda.