Governor of the National Bank of Ukraine Valeria Gontareva has held a monthly meeting with senior executives of the largest banks. The National Bank was also represented at the meeting by First Deputy Governor of the National Bank Oleksandr Pusaruk, Deputy Governors Vladyslav Rashkovan, Dmytro Sologub and Oleh Churii, Director of the Banking Supervision Department Kateryna Rozhkova and Director of the Financial Monitoring Department Ihor Bereza. The meeting was held at the National Bank of Ukraine on November 3, 2015.

Valeria Gontareva reminded the bankers that 8 draft laws initiated by the National bank had been tabled to the Verkhovna Rada for consideration. “We are working closely with the Verkhovna Rada and hope that our draft laws would be voted through the parliament in the nearest future,” said the NBU Governor. Valeria Gontareva stressed the urgent importance of passing Draft Law No 2449 On Amendments to Article 8 of the Law of Ukraine On Measures to Facilitate Bank Capitalization and Restructuring.

The Governor of the National Bank said an IMF mission is expected to visit Ukraine in the nearest future. “The National Bank of Ukraine backs the tax reform proposed by the Ministry of Finance. In our view, this tax reform would enable us to deliver a more balanced budget next year and maintain cooperation with the IMF,” said Valeria Gontareva.

Valeria Gontareva also said that the Board of the National Bank of Ukraine had decided to leave the discount rate unchanged at 22% per annum. The Board of the National Bank of Ukraine took into account ongoing short-term inflation risks. Headline inflation in September 2015 accelerated to 2.3% mom, primarily reflecting lagged effects of Hryvnia devaluation on  prices of seasonal goods and further increases in administered prices.

Valeria Gontareva briefed the bankers about the situation in the FX market.    “The nervous sentiment gripped the foreign exchange market before the local elections.  The National Bank of Ukraine announced interbank FX interventions twice last week, but not a single bid for purchase of foreign currency was submitted by the authorized banks. On October 30 and November 2, we held the FX auctions, through which USD 67.5 million was sold in the interbank market,” said Valeria Gonatreva.  She underlined that the National Bank of Ukraine has the relevant tools and international reserves capable to ease the undue tension in the FX market.  “Once again, I would like to stress that we are committed to maintaining a flexible exchange rate regime. However, we see no reasons for more substantial exchange rate fluctuations than those that have been recorded in the past few months,” said Valeria Gontareva.

Oleksandr Pysaruk unveiled changes to the credit risk assessment methodology applied by banks. “Yesterday we presented a draft of the Guidelines on Credit Risk Assessment. We have had a lot of internal discussions with the involvement international experts. We have managed to deliver the Guidelines that meet international standards. We intend to put the Guidelines in place from April 1, 2016, meaning that banks will be given a transition period of about six months to adjust to the changes,” said the First Deputy Governor of the National Bank.

In view of the above, the diagnostic studies of the next twenty banks will be postponed until later. “We originally scheduled the diagnostic studies of the next twenty banks for October 1, 2015.  However, given that from April 1, 2016, banks will be carrying out a credit risk assessment under the new Guidelines, we have decided to reschedule the diagnostic studies until later, so that banks will be able to assess the quality of their loan books under the new Guidelines, and possibly using the methodology that has undergone some changes,” said Director of the Banking Supervision Department Kateryna Rozhkova.