REUTERS
He called out the regulator's leadership over what he said were "blunders" in setting a key policy rate.
The top management of the National Bank of Ukraine made serious mistakes in late 2018 - early 2019 by applying wrong forecasts in setting the bank's key policy rate, which seems to be a directed effort to inhibit Ukraine's accelerating development, says NBU Council Chairman Bohdan Danylyshyn.
Lowering the discount rate by 2 pp to 13.5% is a correct, but belated, step towards easing monetary policy, Danylyshyn wrote on Facebook, according to Ekonomichna Pravda.
"Belated is a decision to raise the limit of intervention in the foreign exchange market to $50 million per day. This should've been done in early November. With the inflation rate at 5.1% over the past year, while industrial deflation is actually being observed, the key rate at 15.5% could be considered sabotage on the way toward easing monetary policy," he stressed.
Read alsoNBU cuts key policy rate to 13.5%, two-year low
"The NBU's current policy is situational, not supported by real scientific justification, aimed at increasing dependence on external financing and making Ukraine vulnerable to extraordinary events like the crises of 1998 and 2008," Danylyshyn added.
He emphasized that a slow lowering of the key rate amid low inflation makes it impossible to lend to large enterprises in the national currency.
"The blunders of the NBU top managers late last year and early this year on setting the discount rate based on false assumptions and forecasts have far-reaching consequences and may have signs of a directed effort to inhibit policies of the country's accelerated development. We can say that lending revival in 2019 has failed.
Even if the Board of the National Bank lowered the key rate by 3% at their meeting on December 12, this wouldn't have fundamentally turn the tide – they should have started cutting the rate back in the spring. Today, the real rate for Ukraine should be 10% per annum (neutral rate for Ukraine is 3%), taking into account the current level of inflation by Consumer Price Index," wrote the head of the NBU Council.