NBU Council confirms relevance of main principles of monetary policy for medium term

The National Bank Council confirmed the relevance of the Main Principles of Monetary Policy for the Medium Term, approved in September 2024.

This is stated in the NBU material, Ukrainian News Agency reports.

This document defines the goals, objectives and principles of monetary policy, as well as the features of the application of monetary instruments during a full-scale war and a certain period of post-war recovery.

The main principles stipulate that the National Bank:

- applies a flexible inflation targeting regime to maintain price stability. Monetary policy is aimed at bringing inflation to the target of 5% over an appropriate policy horizon, which does not exceed three years;

- uses a coordinated combination of interest rate and exchange rate policy instruments, currency restrictions, and, if necessary, other instruments;

- makes efforts to strengthen the effectiveness of monetary transmission channels and further restore the effectiveness of the discount rate in fulfilling its role as the main monetary instrument;

- contributes to maintaining real interest rates on term hryvnia instruments at a sufficiently high level to ensure the protection of hryvnia incomes of the population from inflation;

- adheres to the principles of managed exchange rate flexibility as a transitional regime on the way to a return to floating exchange rate formation.

As Ukrainian News Agency earlier reported, in accordance with the law on the National Bank of Ukraine, the Chairman of the NBU Council is elected for a term of 3 years.

The composition of the NBU Council is formed by the Parliament and the President - 4 members each.

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