Flexible exchange rate and high deposit rates: NBU shares its plans.

The Council of the National Bank of Ukraine has adopted the main principles of monetary policy aimed at reducing inflation to 5% over the next three years.

According to the NBU, this approach differs from the previous inflation targeting regime that was in place before the start of the war. At that time, the period for bringing inflation back to target was 9-18 months. Now, the NBU is using a more flexible approach and, when the economy stabilizes, will return to the previous regime.

The regulator will also work on increasing the efficiency of monetary transmission channels to strengthen the role of the discount rate as a monetary policy tool. To achieve this goal, the NBU will reduce economic uncertainty, maintain confidence in the hryvnia, and gradually ease currency restrictions.

The National Bank will continue to maintain a flexible exchange rate until it returns to full flexibility, as well as maintain high interest rates on hryvnia deposits to protect the population's income from inflation. This will also help reduce risks in the foreign exchange market and stabilize inflation expectations.