NBU ready "for any developments" in economy – Governor

The National Bank today is ready for any developments in the economy, said NBU Governor Kyrylo Shevchenko.

"Taking into account that the banking system is absolutely stable, we have sufficient foreign exchange reserves as of today," Shevchenko told an annual meeting of the European Business Association on Thursday, according to an UNIAN correspondent.

"We, as the National Bank, are ready for any developments in the economy, but we would like to hope for the better. That is, we are ready to react in both directions, and I very much hope that the reaction towards a significant slowdown in the economy will be very temporary," Shevchenko said.

He noted that the biggest uncertainty is over the spread of the coronavirus and, accordingly, the epidemiological situation.

"We see how businesses react to the weekend quarantine. I can say that the economy has already sustained the biggest shock, and businesses have adapted to work amid quarantine. This is a painful blow to the economy, so we are ready to support it with our monetary instruments. This is what all the central banks worldwide are doing," stressed the central bank chief.

The regulator is shaping its monetary policy taking into account the existing uncertainty, and the monetary policy for the near future and next year it will remain bi-directional.

"If we expect further strengthening of quarantine measures, it's logical that this will lead to a decrease in consumer demand, and the economy won't recover so quickly ... And so we are looking into this today – if we have a further decrease in consumer demand, we understand that we, as a central bank, must react, and we will apply all facilities, starting from our key rate and all the rest of the toolkit," Shevchenko said.

Read alsoRada failing to meet deadline for 2021 Budget adoption – HetmantsevHe noted that the indicators of the third quarter against the second one, including GDP, are much better – the fall was 3.5% against 11%, that is, the situation started to slightly recover.

"We even spotted a revival in lending. This decline is, unfortunately, seen in annual terms, but the third quarter showed that recovery is possible. Therefore, our baseline forecast, which we released in October, nevertheless lays down economic economy," the NBU governor stressed.

Background

According to the State Statistics Service, Ukraine's GDP in Q3 2020 was down by 3.5% on year.

At the same time, compared to the second quarter of 2020, GDP in the third quarter grew by 8.5%.

The economy ministry says the GDP fall in the first nine months of 2020 slowed down to 5.5% after dropping by 5.8% in January-August.