On 1 December 2011, the National Bank of Ukraine hosted a working meeting between Governor of the National Bank of Ukraine Sergiy Arbuzov and foreign representatives from investment companies and funds, who are experts in the field of investment activity, in particular, Dragon Capital, Ice Canyon, Ashmore, Spinnaker, BTG, Stone Harbor, UBS and others.

During the meeting the sides discussed issues related to the development of the banking system of Ukraine, outlook for the foreign exchange market, bank liquidity, and possible scenarios for Ukraine's economy development.

The representatives from investment companies and funds thanked the Governor of the National Bank of Ukraine for hosting the meeting and emphasized that today, in times of economic instability experienced by many countries, it is of vital importance for investors to have the opportunity to meet the market regulator and feel comfortable when implementing investment projects.

Governor of the National Bank of Ukraine Sergiy Arbuzov thanked the representatives from investment companies and funds for their confidence and stressed that the National Bank of Ukraine demonstrates maximum openness in its performance and readiness for dialogue.

Sergiy Arbuzov drew the attention of the attendees to key macroeconomic indicators “Today it is clear that GDP growth in Ukraine will stand at 5% at the end of the year, notwithstanding the fact that inflation is likely to stand at 7.5%”.

“This resulted from the joint efforts undertaken by the National Bank of Ukraine and the government.  We were determined to hit the target and the result we have achieved gives us fundamental reasons for optimism as we have attained GDP growth and record low inflation within just one year,” noted the Governor of the National Bank of Ukraine.

During the meeting Sergiy Arbuzov emphasized that the exchange rate policy pursued by the National Bank of Ukraine is directly related to the Balance of Payments. Sergiy Arbuzov drew the attention of the attendees to the fact that until recently the National Bank of Ukraine projected the consolidate balance of payments surplus.

“Today it is obvious that the balance of payments will show a deficit at the end of the year. However, there is no reason for concern as we analyze movements in the current account of the balance of payments and also see that the financial account recorded a net financial inflow. In addition, we have introduced a set of measures to ease pressure on the gold and foreign exchange reserves. In particular, we mean making payments for energy imports in Russian rubles, thereby putting an end to the exhaustion of the gold and foreign exchange reserves. Furthermore, we accept on an account licences for mining gold, which will be included into the reserves. We introduce an initiative related to switching to settlements in the domestic currencies with Ukraine’s trading partners, such as China, the Russian Federation, European countries and others,” said the Governor of the National of Ukraine and emphasized that the exchange rate policy does not give rise to any unrest or concern, given a clear understanding of the amount of reserves, how they will be used and what should be taken into account.

“We have a clear understanding of the causes of a deficit, our strengths, and transformations that might occur within the next months or in the long run. Therefore, we intervene in the process of exchange rate formation process only when we consider fluctuations to be sufficiently strong,” noted Sergiy Arbuzov.

According to him, the Ukrainian citizens not only purchase and sell the foreign exchange, but also work with it as they could work in the well-developed stock market. Thus, the foreign exchange is treated as a specific type of share with its own quotation, which is equal to exchange rate fluctuations. Unfortunately, it harms Ukraine’s economy and ordinary people. “We are aware of it and are currently making many efforts to expand the set of instruments available for a domestic investor,” added the Governor of the National Bank of Ukraine.

“We live in a time when the crisis is unfolding in the euro zone, the situation in the USA is deteriorating further, and the whole world is awaiting the outcome of further developments. With a view to preventing negative repercussions, we are currently focused on developing mechanisms (instruments) allowing investors to invest funds into our economy, such as certificates of the National Bank of Ukraine, T-bills, and issuance of investments coins intended, which are  for domestic investors,” said Sergiy Arbuzov, summing up the outcome of the meeting.