The NBU is rolling back its emergency monetary measures to boost the effect of the higher key policy rate and curb inflation. In line with the announced schedule, the NBU will suspend long-term refinancing and interest rate swaps at the start of
This decision is consistent with the Monetary Policy Guidelines for 2021 and the Medium Term.
“Phasing out the emergency monetary measures is in line with the NBU’s monetary policy, which aims to curb inflation. On the other hand, this decision will not affect the banking system, given its high liquidity surplus,” said NBU Governor Kyrylo Shevchenko.
The last long-term refinancing tender will be held on 10 September, and the last interest rate swap auction is scheduled for 29 September.
“The suspension of further interest rate swap transactions by the NBU does not mean that the regulator is no longer interested in developing this instrument. We are ready to continue to discuss ways to improve the infrastructure of different segments of the financial market,” said NBU Deputy Governor Yuriy Heletiy.
In addition, the NBU continued to normalize the operational design of its monetary policy to increase the efficiency of monetary transmission. Specifically, from 1 October 2021, the maturity of refinancing loans offered in weekly tenders will be reduced to 30 days from 90 days.
In June 2021, the NBU unveiled plans to phase out its emergency monetary instruments. These instruments provided additional support to the banking system and lending during the most difficult period of the crisis and at the early stage of economic recovery. However, they become irrelevant as the economy returns to steady growth and the financial market stabilizes.