The Council of the National Bank of Ukraine has approved the Annual Report of the National Bank of Ukraine for 2014, which has previously been approved by the Board of the National Bank of Ukraine.
The information presented in the Annual Report for 2014 covers the key aspects of the performance of the National Bank of Ukraine in the reporting year, which operated under unprecedentedly difficult conditions facing our country. The built-up imbalances and the banking system's exposure to substantial shocks required the National Bank to implement urgent, unpopular, yet necessary financial sector reforms and put in place a package of prompt decisive stabilization measures, most of which were administrative. As part of the efforts to upgrade the monetary policy framework, the National Bank of Ukraine has embarked on preparations for the adoption of an inflation targeting regime that has globally proved to be the most successful monetary strategy. The abandonment of a fixed hryvnia exchange rate was the basic prerequisite for adopting an inflation-targeting framework.
The Annual Report reviews the monetary policy measures, both mere contingency measures and standard ones, taken by the National Bank of Ukraine in 2014 and provides performance criteria for the monetary policy in the mid term. It provides an overview of the reform process in the banking sector, highlights the peculiarities of the operation of the banking sector under conditions of external aggression, and presents the results achieved by the National Bank in fulfilling the tasks in the areas of banking regulation and supervision, ensuring cash circulation and cashless transactions, international cooperation, law-making activities, economic analysis, reporting and statistics, the ongoing NBU transformation project, and measures aimed at increasing financial literacy among the public. In order to ensure the completeness of the reporting information, the Annual Report provides insight into the economic environment (real, financial, fiscal, and external sectors), in which the National Bank of Ukraine operated in 2014.
The development of a stable banking system, which would serve as an engine of economic growth, remains one of the key objectives for the National Bank of Ukraine and involves structural changes in the banking system, strengthening its systemic resilience, enhancing predictability and efficiency. According to the criteria approved by the Council of the National Bank of Ukraine, the NBU’s monetary policy during the nearest years will be geared towards gradually lowering inflation and attaining the objective of bringing down annual inflation rates to 5% in the mid term (from 3 to 5 years) with a permissible deviation of ±1 percentage point.
The Annual Report is not a fixed-format document. Being one step ahead of the completion of the NBU Transformation Project, the principle underlying the presentation of information in the Annual Report for 2014 was intended to reduce the risks of uncertainty by enhancing the transparency of the reporting information. An executive summary of the Report is presented in the Key Points section. Detailed information on last year's key events is available in the Calendar of Principal Events. The most relevant issues are presented in the insertions. Information on related issues and functions is aggregated in the information blocks representing the respective areas of activities of the National Bank of Ukraine. The macroeconomic conditions are presented in a separate section.
In 2014, the Annual Report of the National Bank of Ukraine for 2014 was audited by the international audit company Deloitte, a member firm of Deloitte Touche Tohmatsu Limited, which delivers services in audit, consulting, financial advisory, risk management, and related services in more than 150 countries. At the consent of the Auditor, the Annual Report includes the auditor's report on the consolidated financial statements for 2014.
For reference
The preparation and dissemination of the Annual Report is common practice among global central banks. The National Bank of Ukraine prepares and publishes the Annual Report in accordance with Articles 15 and 68 of the Law of Ukraine On the National Bank of Ukraine. The Consolidated Financial Statements of the National Bank of Ukraine are an integral part of the Annual Report. The Annual Report of the National Bank of Ukraine has been published since 1993, and posted on the NBU's official website since 2001. The Annual Report is available in Ukrainian and English