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NBU promises to stop printing “dangerous” money

Photo: Oschadbank

The NBU’s goal is to absorb excess liquidity through tighter reserve requirements and gradually return to a floating exchange rate.

The National Bank will no longer use “dangerous” money printing to finance public spending, said the head of the National Bank, Andrei Pyshny, in an interview with the Financial Times.

According to him, the printing of billions of hryvnias by the NBU to close the budget deficit involves a great risk for the country’s macro-financial stability.

“It’s a quick fix, but very dangerous,” Lush said.

It is noted that the Ministry of Finance does not want to enter the domestic bond markets or increase revenues.

It has since reversed course, paving the way for a $15.6 billion loan that the IMF and Kyiv agreed on last week but still needs approval from the fund’s executive board.

“On his first day in office, he undertook to improve relations with the government, meeting with Finance Minister Sergei Marchenko “until late at night”. They entered into an agreement according to which the central bank adjusted the its requirements for reserve banks, and the ministry offers creditors more attractive conditions,” – said the message.

Pyshny emphasized that the NBU’s goal is to absorb excess liquidity through tighter reserve requirements and gradually return to a floating exchange rate.

The head of the NBU added that the agreement with the IMF will help “guarantee that the coalition of donors will commit itself to providing assistance in the amount of about $40 billion” this year.

He said the NBU will revise its forecast for 2023 GDP growth to 0.3% next month, after a 30% decline last year, reflecting the impact of Russian missile strikes on Ukraine’s energy infrastructure in winter time.

Recall that the NBU increased the sale of foreign currency for the first time since January.

It was also reported that by the end of 2022, the aggregate balance of payments of Ukraine was formed with a deficit of $2.9 billion, while in 2021 the surplus reached $487 million.

Source: korrespondent

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