OREANDA-NEWS. When exercising its main function the National Bank shall proceed from the priority of achievement and retention of the price stability in the country, thus preserving the purchasing power of the national currency by maintaining low, sustained rates of inflation (measured by the Consumer Price Index) in the mid-term prospective (between 3 and 5 years).

Over the first six months of 2013, annual CPI growth fluctuated within a range of “minus” 0.8% (in the March-April period) to “minus” 0.1% (in June).

The pricing dynamics was, inter alia, driven by:

an increase in the supply of food items, which have the largest weight in the consumer basket, thanks to a substantial grain, potato, vegetable and fruit harvest gathered in the past two years and the improved transportation and food storage infrastructure. At the same time, world food prices remained relatively flat;

absence of substantial adjustments of administratively-regulated prices and tariffs;

sound monetary policy pursued by the National Bank of Ukraine which helped avert shocks of a monetary nature and improve market expectations;

The stable monetary unit of Ukraine paved the way for lowering costs of resources, helped prevent household savings from depreciating, and boosted the pricing advantage of Ukrainian manufacturers.

In addition, it allowed the National Bank of Ukraine to take systemic measures aimed at boosting economic growth. In particular,

liquidity of the banking system was actively supported;

the discount rate and refinancing loan rates were lowered;

more flexible requirements to obligatory reserves created by banks were introduced.

These measures amid the expansion of the banks' resource base have ramped up lending to the real sector of the economy and helped reduce the cost of loans. Thus, the stock of corporate loans rose by 3.3 % in the first half of the year.

In June, the average weighted interest rate on loans in the national currency went down to 15.3 % from 17.6 % in December 2012, whereas that on the interbank credit market fell to 2.3 % from 8.1 % respectively.