NBU Wins Central Bank of the Year Category – Central Banking Awards

Central Banking Awards has recognized the NBU as Central Bank of the Year. This prestigious international trophy is awarded annually by Central Banking, a publication that covers the operation of central banks and financial regulators.

This is the first time the NBU has won the Central Bank of the Year category. It comes as international recognition of the NBU's effective efforts last year amid a full-scale war.

Central Bank of the Year is usually awarded to a central bank that has reinforced its authority and decisively implemented measures within its mandate that have ensured the pursuit of cutting-edge policies and adequate communication support for the central bank's activities.

This year, international experts have highly praised the NBU team's comprehensive efforts that have ensured the stability and continuity of Ukraine's financial system in the unprecedented conditions of the full-scale war.

First, the NBU in the earliest days of the war made a number of tough and effective decisions that helped preserve financial stability. The central bank managed to quickly optimize its monetary and exchange rate policies. It successfully maintained public confidence in the domestic currency, control over inflation, and relative stability in the FX market even as exports fell significantly and millions of Ukrainians left Ukraine in search of safe haven. Given the need to finance the Armed Forces of Ukraine to repel russia's full-blown attack, the NBU supported the state budget by purchasing government securities in the primary market. At the same time, the NBU took a restrained approach to the monetary financing of the state budget that helped maintain Ukraine's macrofinancial stability.  

Second, the central bank ensured the banking system's uninterrupted operation. For more than a year, the Ukrainian banking system has been successfully meeting wartime challenges: the banks have been working nonstop, maintaining liquidity and client deposits, and lending to businesses. All of this has been made possible by the NBU's rapid response, the banks' coordinated efforts, and the previously conducted reform of the banking sector. The banking system came into the full-scale war well capitalized, resilient, and with contingency plans that provided for uninterrupted operation in emergency conditions.  

Third, the NBU ensured data security, information protection, and the full operation of cashless payments infrastructure. Ukraine's financial institutions withstood numerous cyberattacks and worked without disruptions. To protect the banks' data and information systems, the central bank enabled the banks to use cloud services to process and store system data. Since the outbreak of the full-scale war, despite missile attacks and terror from russia, and thanks to selfless efforts of financial market participants, Ukraine's payments infrastructure has been providing reliable cashless transaction services and retaining Ukrainians' confidence in cashless payments. By maintaining active communications with the market and the public and by ensuring business continuity in wartime, the NBU enabled Ukrainians to actively use cashless payments.

Fourth, the NBU preserved households' and businesses' trust in the banking system. Specifically, Power Banking, a project initiated by the NBU, ensured the uninterrupted provision of financial services even as russia perpetrated energy terror. Therefore, retail deposits have been steadily growing despite the war. After getting over the shock of the earliest weeks of the full-scale invasion, corporate deposits also recovered fairly quickly. The banks continue to lend. As the war grinds on, however, their risk appetite has declined significantly, as has the willingness of households and businesses to take out loans amid heightened uncertainty. State programs have been playing a key role in supporting the lending effort.

Fifth, during the war, the NBU has been communicating with the public, businesses, financial system participants, and state authorities on a regular basis. This effort made it possible to avoid panic at the onset of the full-scale war and to maintain a high level of predictability of the regulator's actions and awareness of their prerequisites. 

In addition, since the earliest hours of the full-blown russian offensive, the NBU has been communicating with its international partners. On the one hand, the regulator has been raising international financial support. On the other hand, the central bank has repeatedly called on the allies to step up sanctions pressure on russia in order to thwart its capability to bankroll its war machine. Effective cooperation with international organizations, central banks, and state authorities of partner countries has contributed to the preservation of financial stability in Ukraine and become a key factor in imposing and maintaining sanctions against russia.

"I am grateful to Central Banking for its high assessment of the NBU's work. Such recognition comes as an honor for our team, which has been holding the financial frontline since the first shots rang out on the horrible morning of 24 February 2022. I thank all NBU employees for fulfilling their duties and acting in a coordinated and efficient manner. I also appreciate the Ukrainian banks’ and their teams’ united efforts and awareness of their responsibility, because this result came from the synergy of each of your actions," said NBU Governor Andriy Pyshnyy. "The NBU has shown its professionalism and composure to the whole world. The NBU has proven its ability to meet its commitments under any conditions and to act promptly and go out of its way to ensure the smooth operation and stability of the financial system.  We will stay the course. Many wartime challenges and – most important – Ukraine's Victory and reconstruction are ahead of us, and we have been getting ready for them. Despite everything, this terrible year has made us stronger and better equipped to do even more for our country."

To read more, follow the link to Central Banking Awards' press release.