A regular meeting between senior executives of the National Bank of Ukraine and the Ministry of Economic Development and Trade of Ukraine (hereinafter the Ministry) has been held at the NBU. Governor of the NBU, Ms Valeria Gontareva, NBU Deputy Governors, Mr Yakiv Smolii, Mr Vladyslav Rashkovan, Mr Dmytro Slogub, and Mr Oleh Churii, Acting NBU Governor, Ms Kateryna Rozhkova, met with Ukraine's Economy Minister, Mr Aivaras Abromavičius, and Deputy Economy Minister, Mr Maksym Nefiodov, to discuss the economic stabilization, improving the business climate, and measures to promote sustainable economic growth.
The meeting participants reviewed the macroeconomic forecasts for 2016 and the parameters of the IMF-supported Extended Fund Facility (EFF) Arrangement. In particular, the discussion was focused around the outlook for global commodity markets and the impact that a ban imposed by Russia on the transit of Ukrainian goods through its territory would have on Ukraine’s economy.
The meeting participants devoted special attention to the NBU’s plans to remove temporary administrative restrictions introduced in 2014-2015 to prevent capital outflow. Among the restrictions that need to be removed immediately to improve the country’s business climate, the representatives from both institutions mentioned easing of surrender requirements for exporters and the removal on FX purchases linked to the repatriation of dividends abroad. These restrictions will be phased out in a gradual manner. “The NBU has drafted and agreed with the IMF a schedule for the removal of such measures, which is contingent on meeting certain conditions. This schedule is not time-bound,” said Ms Gontareva. In particular, the removal of restrictions is contingent on continued cooperation with the IMF, macro-financial stabilization, and a build-up of NBU’s international reserves. Additionally, the NBU Governor invited representatives from the Ministry to join a Working Group set up by the NBU to design a road map for FX liberalization measures.
The meeting participants pointed out that privatization of state-owned enterprises is yet another way to encourage foreign exchange inflows into Ukraine’s economy.
“Our top priority is to launch a large scale privatization program this year. This initiative will enable us to attract funds from strategic investors and upgrade manufacturing facilities. The EU-Ukraine Deep and Comprehensive Free Trade Agreement (DCFTA) became fully operational from 1 January 2016. The DCFTA with the EU not only offers Ukraine access to the EU market, but also provides our country with an opportunity to become “Europe’s commodity producer.” Owing to favorable conditions for export to the EU and a skilled and highly qualified workforce in Ukraine, European companies may well benefit from locating their manufacturing facilities in our country,” said Mr Abromavičius.
The representatives from the NBU and the Ministry agreed to pool their efforts to create appropriate conditions for leading international companies, such as PayPal, an international online payment system, and others to enter the domestic market. In particular, in the summer of 2015, the NBU amended the Regulation On the Procedure of Registration of Payment Systems, Payment System Participants, and Payment Infrastructure Service Providers to simplify the registration procedure for international online payment systems.
Today’s meeting featuring senior executives of both institutions is the first in a series of scheduled meetings for 2016. From now on, meetings between senior executives of the NBU and the Ministry will be held more frequently.