The Board of the National Bank of Ukraine has decided to the toolkit of CD placement operations to include new instruments.

First, a method for the acceptance of bids submitted by banks to participate in an interest-rate CD placement. Under the current rules, successful bids from banks are satisfied at interest rates indicated in the bids.  These rules will be supplemented with a new method when all the bids are accepted at a marginal interest rate set by the NBU.

In both cases, the bids submitted by banks quoting higher interest rates than the marginal interest rate will be rejected. The application of this method to CD placement tenders is in line with recommendations of the European Central Bank.

Second,  the maturity of CDs has been extended from 90 days to 100 days.

These steps have expanded the NBU toolkit to shape a segment of the yield curve and enhance the efficiency of the monetary transmission mechanism to ensure its consistency with an inflation targeting regime. Information on when these instruments will be put in place will be communicated to banks in due course.

The amendments to this effect are approved by  NBU Board resolution No70 of 27 July 2017 On Amendments to the Regulation on the Application by the National Bank of Ukraine of Standard Liquidity Management Instruments for the Banking System