As a monetary authority, a central bank’s primary objective is to ensure macroeconomic financial stability in general and external stability in particular. As a custodian, the central bank’s main objectives are to ensure liquidity, safety and yield on deployment of reserves. In considering management of reserves, the benefits and costs of holding reserves are constantly assessed.
Despite the gradual recovery of the economy, the upward trend in inflation will continue over the coming three months. This could worsen inflation expectations even further, and encourage depositors to convert their hryvnia savings into FX ones. For this reason the NBU has decided to return to an active interest rate policy to prevent these negative trends.