Governor of the National Bank of Ukraine (NBU) Kyrylo Shevchenko has said the central bank must press forward with cutting the key policy rate.

"As a central bank, we all must create the necessary conditions for enhancing lending to the real economy. One of the main drivers of loan portfolio growth today has been consumer lending, which is a fairly easy tool for banks to use, but which is not generating a positive impact on the economy or households," he said in a speech on the occasion of his official introduction by the president of Ukraine.

Shevchenko said the NBU must assist banks in balancing their portfolios. On the one hand, it is necessary to step up efforts to reduce the share of nonperforming loans in the banking system and improve the quality of banks' loan portfolios. On the other hand, it is necessary to limit the use of long-term securities that banks buy with available cash instead of lending it to businesses, he said.

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"At the same time, the NBU must press forward with cutting the key policy rate, which will eventually lead to cheaper loans for final consumers – those borrowing from banks."

"We can go a long way toward easing the pressure on banks at this difficult time of coronacrisis. For instance, we need to reconsider the effectiveness of loan holidays, because as loan defaults rise, banks become less and less capable of providing affordable credit," he stressed.

According to the central bank chief, these measures are intended to provide businesses in the real economy with support – lending support.

"Dear colleagues, I have confidence that we are up to the challenge of meeting these objectives. When it comes to team efficiency, I operate on the well-known and time-tested principles: professionalism, knowledge, and skills. As a banker with 25 years' experience, I can tell you that in the world of finance, reputation takes precedence over everything else. I intend to follow this rule during my seven years as NBU Governor," Shevchenko added.