Ukraine's Central Bank in Kyiv / Photo from ZN.ua
In December 2018, the National Bank retained its key policy rate at 18% per annum.
The Central Bank's current monetary requirements are strict enough to further curb inflation in Ukraine, but the liberalization of the monetary policy is possible this year.
"I do not think that the objective of monetary policy is to lower inflation at once," Deputy Governor of the National Bank of Ukraine Dmytro Sologub told reporters. "I try to look at the situation more broadly, analyzing the banking system's lending capabilities and GDP growth."
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In his words, the NBU will monitor and analyze the situation.
"We will look at the situation and evaluate it. I think there is potential for the liberalization of the monetary policy this year," he said.
Although inflation in 2018 was 9.8%, which is higher than the NBU's benchmark, it is important to take into account a U-turn trend towards a decrease in inflation, Sologub said.
Sologub said a decision on the NBU's key policy rate is taken by six members of the NBU board, and he only voiced his opinion.
Inflation in Ukraine in December 2018 in annual terms – compared to December 2017 – stood at 9.8%, slowing from 13.7% in December 2017 year-over-year.
The inflation rate was higher than the NBU's target level, but it dropped to a single-digit indicator for the first time in the past five years, and last year the inflation trend reversed.
In December 2018, the National Bank retained its key policy rate at 18% per annum for the second time in a row after a similar decision in October. Prior to this, the National Bank raised the rate twice in a row – in July to 17.5% and in September to 18% per annum. Ukraine saw the maximum historical value of the rate set at 30% per annum from March 4 to August 28, 2015.