Photo from UNIAN
Ukraine entered the coronacrisis in a much better condition than it had during the 2008 global financial crisis.
The financial sector in Ukraine is going through the global crisis with a significant margin of safety, says National Bank Governor Kyrylo Shevchenko.
Speaking at the Central & Eastern European Forum 2021, Shevchenko said: "Ukraine entered the coronacrisis in a much better condition than it had during the 2008 global financial crisis. GDP growth was stable, inflation and current account deficits were moderate, the National Bank of Ukraine had sufficient reserves, and the banking sector and public finances were healthy," the NBU press service reports.
Shevchenko also spoke about the main steps taken by the central bank to restore the economy. This, in particular, the reduction of the key rate to 6% per annum, lowest in history, as well as the provision of long-term refinancing loans for up to 5 years, the expansion of the list of acceptable collateral from banks, and the introduction of an interest rate swap that banks can use to reduce interest rate risk.
Read alsoUkraine's banking system survives coronacrisis, taking course for online services
In addition, the GDP fall, as per the head of the National Bank, was lower than expected.
In the spring, a 6% decline in GDP was predicted. However, according to the Ministry of Economy, for over 11 months the decline was not so deep – at 4.7%.
"The key condition for maintaining macrostability in Ukraine is continued cooperation with the International Monetary Fund. Today, negotiations with our partners continue. The implementation of the stand-by program will allow ensuring macroeconomic stability necessary for a confident and continued recovery of the Ukrainian economy," Shevchenko said in his address.
Background
Prime Minister Denys Shmyhal said the fall of the domestic economy over 2020 would amount to no more than 5% of GDP.
The Ministry of Economy maintains the basic macro forecast for a 4.8% GDP drop for 2020.
Consumer inflation in Ukraine in December 2020 in annual terms stood at 5%, accelerating from 4.1% a year earlier.