NBU Governor Kyrylo Shevchenko and his Deputy Yuriy Heletiy held an online meeting with EBRD President Madame Odile Renaud-Basso, Matteo Patrone, Managing Director, Eastern Europe and the Caucasus (EEC), Alexander Pavlov, Deputy Head for Ukraine, Financial Institutions, Alexandra Vukosavlevich, Director for Western Balkans and Eastern Europe, Francis Maliz, Managing Director for Eastern Europe and the Caucasus, Oksana Yavorska, Senior Banker of the Department for Financial Institutions, and Artem Shevalev, Deputy Executive Director of the EBRD.
Besides further cooperation of the NBU with the EBRD, the parties discussed the NBU’s macroeconomic policy and priorities in financial sector regulation, continued cooperation with the IMF, reforming state-owned banks, NBU’s support of the banking sector suffering from the COVID-19 crisis, development of green and sustainable finance in Ukraine.
Kyrylo Shevchenko informed the meeting participants about the recent key policy rate increase by the NBU Board and shared expectations that inflation will reach 8% at the end of the year and return to its target of 5% in H1 2022. He also said that the Ukrainian economy is recovering, although slower than expected due to tightening of quarantine restrictions in spring. EBRD representatives, in their turn, supported the NBU Governor and noted the regulator’s positive efforts in the area of monetary policy and supporting the banking sector during the crisis.
At the meeting, the participants also discussed the implementation progress of reforming the state-owned part of the banking sector, particularly privatization of state-owned banks and the solvency of the Deposit Guarantee Fund. EBRD managers stressed the need to continue the corporate governance reform at state-owned banks and expressed readiness to provide help in this area.
The meeting participants agreed that overcoming the pandemic-driven crisis requires introducing new instruments, such as the integration into the global movement to green the financial system and support sustainable finance and the green economy. The news that in April 2021 the NBU and the IFC signed the agreement on cooperation to implement the standards of green and sustainable finance in Ukraine received a positive response. The participants also underlined that the EBRD has extensive expertise in this field and is ready to assist the NBU.
The NBU has called for establishing a specialized financial court to ward off the emergence of new NPLs in the banking sector and ensure that the rights of creditors and investors are safeguarded effectively, Kyrylo Shevchenko said. The parties agreed to continue to discuss this initiative.
While talking about the EBRD’s priorities in Ukraine, Madame Renaud-Basso noted the further development of financial and capital markets, public banking reform, privatization, and the promotion of new instruments of trade finance and lending.
Overall, the EBRD representatives acknowledged that the NBU leadership’s policies on all of the issues discussed had been consistent and comprehensive.