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National Bank: Lack of government forecasts for 2013 restrains discount rate mobility

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Oct. 2, 2012, 3:47 p.m. | Ukraine — by Interfax-Ukraine

The National Bank wants to know the key positions from the government.
© Sohei Yasui

The lack of updated government macroeconomic and financial forecasts for 2013 restrains the mobility of the discount rate, which since March 2012 has been at 7.5%, despite deflation.

"The discount rate is based on inflation, but future, not actual. The National Bank wants to know the key positions from the government," the deputy director of the general department of the monetary and credit policy of the National Bank of Ukraine (NBU), Oleksandr Arseniuk, said at a conference organized by the Adam Smith Institute in Kyiv.

According to him, the NBU, among other things, needs the government's plans regarding the dynamics of gas tariffs for the population and the prospects for cooperation with the International Monetary Fund (IMF, the Stand-By Arrangement will end in December 2012).

However, the official stressed that maintaining price stability remains the key priority of the NBU: a significant acceleration of inflation is not expected.

"There is some uncertainty about future inflation, but to say that we will have an inflationary storm even under the worst-case scenarios is a serious exaggeration. We will not definitely face an [inflationary] storm," the official said.

"If there is no price stability, we won't have an economic growth," he added.

In this regard, he said the measures to invigorate crediting would be taken without compromising price stability.

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