The national Bank kept the discount rate and increased the growth forecast of Ukraine’s GDP in 2017 to 2.8%

The national Bank of Ukraine (NBU) for leveling inflationary risks and achieve goals for inflation in 2017-2018 kept interest rates at 14%, according to a press release from the Central Bank on Thursday, citing the relevant decision of the Board of «rate».

Gontareva is confident in the imminent receipt of the 4th tranche from the IMF under the EFF program

National Bank also raised the inflation forecast for 2017 to 9.1% from 8%, primarily due to the increase in minimum wage from the beginning of the year with 1600 to 3200 UAH per month.

This decision of the government will affect inflation both directly through the increase in consumer demand of the population, mainly on industrial goods, and the cost of production, and indirectly on inflation expectations of Ukrainians, explains the Central Bank.

At the same time, the regulator expects inflation at the level set earlier benchmark — 8%+/-2 percentage points (PP) in 2017 and 6%+/-2 PP in 2018.

The national Bank notes that the disinflationary trend will be achieved through restrained monetary and fiscal policies and by greatly reducing the growth of administrative fees.

In addition, the NBU on Thursday noted that the national Bank increased the forecast of growth of gross domestic product (GDP) in 2017 to 2.8% from 2.5% and reduced in 2018 to 3% from 3.5%.

According to estimates of the Central Bank, economic growth in 2016 was 1.8%.

According to the NBU, the forecast horizon, the economy will gradually approach its potential level: aggregate demand will continue to restrain inflation, although this effect is significantly weakened compared with previous years.

The regulator also revised the forecast of the current account deficit for 2017 and 2018 to about $ 3.5 billion.

According to the NBU, the deficit will be covered by capital inflows in the financial account, primarily by attracting investment and credit resources.

«As a result, the consolidated balance of payments in 2017-2018 will be surplus,» – emphasizes the Bank.

The regulator expects the growth of foreign exchange reserves by the end of 2017 to 21.3 billion dollars by the end of 2018 to 27.1 billion dollars, expecting to receive the planned tranches from the IMF.

«The further increase in reserves remains an important task for the NBU, given the significant volume of payments in 2019», – stated in the message.

Recall that in 2016 the dollar on the interbank market at the beginning of January was $ 23.8 hryvnia, and by the end of February rose to 27 hryvnia. In 2015, in early January, the dollar was worth about 15.9 hryvnia, and by the end of February its value reached 30 UAH and more.

Deputy Chairman of the national Bank Oleg Churiy said that the fall of the hryvnia is associated with the traditional first months of the year the seasonal downturn.

In October, Prime Minister of Ukraine Vladimir Groisman promised this year to keep the hryvnia at the level of 27.2 compared to the dollar. This «standard» was laid in the state budget.

Gontareva is confident in the imminent receipt of the 4th tranche from the IMF under the EFF program

Ukraine has fulfilled all the conditions for the next, fourth tranche under the program of expanded financing (EFF) of the International monetary Fund (IMF), and for making decisions about the allocation of Cabinet of Ministers were only to finalize the technical details, said the head of the National Bank of Ukraine (NBU) Valeria Gontareva. About it reports «Interfax-Ukraine».

«I do not see any prerequisites, additional conditions, which would not give us the opportunity to get the next tranche. The Cabinet still finalizing technical details, so I think that very soon we will sign the Memorandum and the IMF will announce the date of the Board (meetings of the Board of Directors – ed.)», – she said at a press conference in Kyiv on Thursday.

«I have no doubt that this decision will be supported», – said Gontareva.

She found it difficult to specify a specific date for the release of funds Deputy head of the NBU Dmitry Sologub said that the IMF would take about two weeks for a decision after the signing of the Ukrainian party to the Memorandum of economic and financial policies.

The head of the NBU also noted that the draft of the Memorandum all issues for PrivatBank agreed. «Technical questions are not on-site the national Bank», – said Gontareva.

She said that for 2017 in the framework of the EFF planned to allocate to Ukraine the four tranches.

Yesterday it was reported that the issue of further financing of Ukraine is not in the agenda of the meetings of the Board of Directors of the International monetary Fund, which are scheduled till 3 Feb 2017.

Earlier, Finance Minister Alexander Danilyuk said he expects the next tranche from the IMF in early February.

The President of Ukraine Petro Poroshenko in an interview with Bloomberg in Davos, said that Ukraine expects to receive a tranche of the IMF in the coming weeks, because by the end of 2016, our country has fulfilled all the conditions from the previous Memorandum with the IMF.

In turn, the Prime Minister Volodymyr Groysman noted that Ukraine continues negotiations with the IMF.

As reported, Ukraine resumed cooperation with the IMF on a four-year program of expanded financing (EFF) in the amount of 17.5 billion dollars in September 2016 after more than a year break. Under this program, our country received three loan tranches with a total volume of 7.62 billion dollars.

The Ministry of Finance expects that the Board of Directors meeting on Ukraine will take place in late January. The Fund noted that the exact date of meeting is not, however, the Board of Directors will meet to discuss the reform program with Ukraine «in the coming weeks.»

The national Bank kept the discount rate and increased the growth forecast of Ukraine’s GDP in 2017 to 2.8% 26.01.2017

Январь 26th, 2017 by
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