22.12.2016, 13:50
Board of NBU Welcomes the Decision by the NBU Counci to Formalize Inflation Targeting in Ukraine
OREANDA-NEWS. The Board of the National Bank of Ukraine welcomes the NBU Council’s approval of the Monetary Policy Guidelines for 2017 and Medium Term (hereinafter - MP Guidance). "It is critical for the NBU Council and Board to have a common vision of the monetary policy objectives and tasks. The NBU Council hereby has ensured the consistency of monetary policy based on inflation targeting principles that have been declared by the NBU Board in August 2015," underlined NBU Governor Ms Gontareva.
The Monetary Policy Guidelines entrench inflation targeting as a monetary policy framework used by the NBU to achieve the declared inflation targets.
As a side note, the NBU switched to inflation targeting in early 2016. This move has yielded the first results, including a sharp slowdown in headline inflation from 43.3% in late 2015 to 12.1% in November 2016, which paved the way for macrofinancial stabilization in the country.
The NBU Council endorsed the medium-term inflation target of 5%+/-1 pp for the annual increase in consumer price index, which was announced by the NBU Board, and underlined the need to achieve this target in 2019. Also, the NBU Council has maintained the near-term inflation targets: 8% ± 2 pp for December 2017 and 6% ± 2 pp for December 2018.
However, the Monetary Policy Guidelines envisage that the 2017 – 2020 inflation targets are not subject to revision after their announcement. Therefore, the NBU is charged with great responsibility for achieving and maintaining price stability based on the declared inflation targets.
In accordance with the approved MP Guidelines, the core principles underlying monetary policy implementation are as follows:
-focus on achieving and supporting price stability in the country;
-commitment to a floating exchange rate regime;
-forward-looking decision-making;
-transparency of the NBU activity;
- the NBU’s institutional, financial and operational independence.
The NBU Governor said that the monetary policy reform initiated by the NBU Board and upheld by the NBU Council should become an efficient mechanism for ensuring price stability in the country following a protracted period of high and unstable inflation. "In terms of its importance to the economy, this reform can be compared to the currency reform of 1996 which introduced the national currency – the hryvnia. Preserving the purchasing power of the hyvnia has been formally designated today as the key objective of the NBU’s monetary policy," said Ms Gontareva confidently.
The Monetary Policy Guidelines entrench inflation targeting as a monetary policy framework used by the NBU to achieve the declared inflation targets.
As a side note, the NBU switched to inflation targeting in early 2016. This move has yielded the first results, including a sharp slowdown in headline inflation from 43.3% in late 2015 to 12.1% in November 2016, which paved the way for macrofinancial stabilization in the country.
The NBU Council endorsed the medium-term inflation target of 5%+/-1 pp for the annual increase in consumer price index, which was announced by the NBU Board, and underlined the need to achieve this target in 2019. Also, the NBU Council has maintained the near-term inflation targets: 8% ± 2 pp for December 2017 and 6% ± 2 pp for December 2018.
However, the Monetary Policy Guidelines envisage that the 2017 – 2020 inflation targets are not subject to revision after their announcement. Therefore, the NBU is charged with great responsibility for achieving and maintaining price stability based on the declared inflation targets.
In accordance with the approved MP Guidelines, the core principles underlying monetary policy implementation are as follows:
-focus on achieving and supporting price stability in the country;
-commitment to a floating exchange rate regime;
-forward-looking decision-making;
-transparency of the NBU activity;
- the NBU’s institutional, financial and operational independence.
The NBU Governor said that the monetary policy reform initiated by the NBU Board and upheld by the NBU Council should become an efficient mechanism for ensuring price stability in the country following a protracted period of high and unstable inflation. "In terms of its importance to the economy, this reform can be compared to the currency reform of 1996 which introduced the national currency – the hryvnia. Preserving the purchasing power of the hyvnia has been formally designated today as the key objective of the NBU’s monetary policy," said Ms Gontareva confidently.
Комментарии