Last week, on 17-18 May 2017, the National Bank of Ukraine held the next seminar on the Practical Aspects of Formulation and Implementation of the NBU’s Monetary Policy, which was intended for lecturers of higher educational institutions from Kyiv and oblasts of Ukraine. The two-day seminar was held as as part of the Second Annual Research Conference “The Role of the Central Bank in Economic Development” organized by the NBU in cooperation with Narodowy Bank Polski.
The NBU launched a series of seminars for lecturers of higher educational institutions last year. The first seminar on monetary policy formulation and implementation was conducted in November 2016. In April 2017, the NBU held a seminar for lecturers on "Banking Supervision Reforms and the Introduction of Macroprudential Regulation in Ukraine’s Banking Sector". The seminar held in May was the third in a series of seminars arranged by the regulator for lecturers of economic higher educational institutions to provide insight into the activities of the central bank.
The seminar held in May brought together over 40 lecturers of higher educational institutions from Kyiv, Sum, Lviv, Kharkiv, Zhytomyr, Ostroh, Ternopil and Chernivtsi.
The seminar speakers included the NBU’s senior managers, notably the NBU Deputy Governor, directors of the NBU departments and heads of the NBU subdivisions forming part of the monetary stability block.
The seminar was opened by NBU Deputy Governor Dmytro Sologub. In his speech addressed to the participants, Mr Sologub underlined that the regulator focuses its efforts on ensuring the transparency and comprehensibility of its actions. Therefore, the NBU places a great emphasis on communicating its actions to the public and conducting outreach activities intended for experts and academia, market representatives and target audiences.
Summing up the results of the first year when Ukraine operated under an inflation-targeting regime, Mr Sologub said that owing to sound monetary policy inflation slowed down enabling the NBU to achieve the inflation target of 12%, with the public's focus gradually being shifted from the exchange rate target to the inflation.
When outlining the prospects of this regime, Mr Sologub added: “In the long run, the success of inflation targeting will hinge not only on the NBU policy, but also on progress in implementing structural reforms”.
The seminar also featured Mr David Vavra, Managing Partner at OGResearch, who had worked for the International Monetary Fund and the Czech National Bank, served as head of the Monetary Policy Division at the the Czech National Bank and advised central banks and national authorities. Mr Vavra, who has first-hand experience in implementing inflation targeting in Ukraine, delivered a speech on "Features and Experiences of Inflation Targeting Frameworks" at the seminar.
In particular, the speaker explained to the audience why inflation targeting is the most appropriate monetary regime for Ukraine.
“Under a fixed exchange rate regime, the central bank cannot be “brave” and is unable to prevent adverse economic developments, in particular a sharp rise in inflation, said Mr Vavra, adding that “inflation targeting is a regime that makes it easiest for the central bank to behave bravely and pre-emptively”.
The speaker shared findings of the comparative analysis of the experience of the counties that adopted inflation targeting. These countries included Czech Republic, Turkey, Poland, Hungary and others that were similar to Ukraine in terms of level of development and the economy's size. Mr Vavra cited the experience of advanced economies that, despite having low inflation, benefited from the implementation of inflation targeting.
“In addition to curbing inflation, which is critically important for developing economies, the implementation of inflation targeting by advanced economies, including New Zealand and the UK enabled these countries to bring inflation under control and mitigate inflation volatility,” underlined Mr Vavra.
The seminar participants praised the speakers for their professionalism, effort, and delivery, pointing out that both lecturers and students lack seminars that provide them with an opportunity to receive information first-hand. Therefore, representatives from higher educational institutions invited the speakers to their universities to give lectures for future financiers and bankers.