At a scheduled meeting of the Monetary Policy Committee (MPC), the National Bank of Ukraine (NBU) once again decided to keep the key policy rate at 10%, given the ongoing war in the country unleashed by Russia.
“Under the current conditions, the impact of the key policy rate on the functioning of the money market and the FX market remains limited. With this in mind, the key policy rate will stay flat at 10% until monetary transmission channels are effective again,” the NBU said on its website on Thursday.
As reported, in early March, the National Bank, in the face of Russia’s large-scale armed aggression, kept the refinancing rate at 10% per annum, postponing the decision to revise it until the economic situation normalizes.
The National Bank of Ukraine (NBU) will soon consider some relaxations regarding foreign exchange operations, said the head of the National Bank of Ukraine (NBU) Kyrylo Shevchenko.
“I think that in the near future we will consider some concessions regarding foreign exchange transactions. In principle, we are already doing them,” he said in an interview with Economic Truth.
The head of the NBU added that today the difference between the official rate and the rate on the black market has begun to narrow quite significantly compared to what it was at the beginning of the war.
“If at the beginning of the war we saw in exchangers that the exchange rate fluctuated around UAH 40/$, today the average cash market rate is 31.63-32.05 UAH/$. This is not a very wide spread and this makes us happy”, he pointed out.
As reported, on February 24, the National Bank suspended the work of the foreign exchange market of Ukraine, except for the sale of foreign currency, and fixed the rate at the level of February 24.
Dynamics of changes in discount rate of NBU
NBU
The Board of the National Bank of Ukraine (NBU) on 8 March 2022 decided to purchase war bonds for the amount of UAH 20 billion due to the need to finance the Armed Forces of Ukraine and for the duration of martial law.
“At the same time, the NBU will only provide limited financing for the critical expenses of the government. This will allow to minimize the risks of high inflation and disrupting macrofinancial stability and will facilitate quick return to market-driven operation of economy and financial markets after the war,” the central bank said on Tuesday.
This amount paid for war bonds constitutes approximately 1.3% of the total amount of Ukraine’s state budget expenditures for 2022.
The NBU said that the NBU is not a solo or even main sponsor of the government expenses.
“Despite the war, Ukrainian enterprises pay their taxes and large amounts are donated by people to support the Army. Our international partners also provide massive military, financial and humanitarian assistance,” the regulator said.
The central bank said that the NBU will take a separate decision if the further financing of critical expenses is required. It will take into account the military situation, social and economic standing of Ukraine, situation in financial markets and public finances, as well as other sources of budget financing.
“Lending to the government is a temporary measure taken by the NBU due to martial law. After the war is over and the economy is back to operating on market-driven principles, the NBU will return to its standard inflation-targeting regime with a floating exchange rate and will be reinstated the ban of financing the government,” the National Bank said.
The regulator said that the Verkhovna Rada of Ukraine has amended the laws in order to allow these transactions between the NBU and government. Namely, it has decided temporarily for the duration of martial law to waive Article 54 of the Law of Ukraine on the National Bank of Ukraine that prohibits the NBU from granting loans to the state.
The National Bank of Ukraine (NBU) condemns the decisions of businesses and people in the current difficult situation to set prices for goods and services in foreign currencies, in particular in dollars or euros.
“Setting prices in Ukraine in foreign currency is illegal. Such actions are not only immoral in a war, but are also a direct violation of Ukrainian legislation,” the National Bank said in a statement on Thursday.
The NBU recalled that the hryvnia as a national currency is the only legal tender on the territory of Ukraine and must be accepted by all individuals and legal entities without any restrictions throughout the country and for all types of payments in accordance with Article 35 of the Law “On the National Bank of Ukraine”.
The regulator clarified that, in particular, he became aware of cases of setting prices for rental housing in euros in Ukraine, which violates the law.
The National Bank of Ukraine (NBU) has opened a current account for humanitarian purposes to help Ukrainians affected by Russian aggression, the press service of the regulator said on Tuesday.
According to the report, the account is meant for charity contributions from Ukraine and from abroad.
“To streamline the inflows of funds as humanitarian aid to Ukrainians affected by the war, the NBU has opened an account for the Ministry of Social Policy to accumulate charitable contributions for social needs in wartime,” the press service said, citing Governor of the National Bank Kyrylo Shevchenko.
He said that unlike the special account that has been opened to finance the needs of the Armed Forces of Ukraine, money from this account will be used to help those hardest-hit by the war with Russia.
For foreign currency remittances:
UA823000010000032302338301027 currencies USD, EUR, GBP
For EUR remittances:
BENEFICIARY: National Bank of Ukraine
BENEFICIARY BIC: NBUAUAUXXXX
IBAN DE05504000005040040066
PURPOSE OF PAYMENT: for crediting account 32302338301027
BENEFICIARY BANK NAME: DEUTSCHE BUNDESBANK, Frankfurt
BENEFICIARY BANK BIC: MARKDEFF
BENEFICIARY BANK ADDRESS: Wilhelm-Epstein-Strasse 14, 60431 Frankfurt Am Main, Germany
For USD remittances:
BENEFICIARY: National Bank of Ukraine
BENEFICIARY BIC: NBUA UA UX
BENEFICIARY ADDRESS: 9 Instytutska St., Kyiv, 01601, Ukraine
ACCOUNT NUMBER: 400807238
BENEFICIARY BANK NAME: JP MORGAN CHASE BANK, New York
BENEFICIARY BANK BIC: CHASUS33
ABA 0210 0002 1
BENEFICIARY BANK ADDRESS: 383 Madison Avenue, New York, NY 10017, USA
PURPOSE OF PAYMENT: for crediting account 32302338301027
For GBP remittances:
BENEFICIARY/RECIPIENT NAME: National Bank of Ukraine
SORT CODE: 60-92-42
ACCOUNT NUMBER: 0080033041
GB52CHAS60924280033041
REFERENCE FOR CREDITING ACCOUNT: 32302338301027
BENEFICIARY BIC: NBUA UA UX
BENEFICIARY ADDRESS: 9 Instytutska St., Kyiv, 01601, Ukraine
BENEFICIARY BANK NAME: JP MORGAN CHASE BANK NA, London
BENEFICIARY BANK BIC: CHASGB2L
BENEFICIARY BANK ADDRESS: 125 London Wall, London EC2Y 5AJ, UK
