Arbuzov: the Board of the NBU has preserved the dependence of Kiev from creditors

Арбузов: Совет НБУ законсервировал зависимость Киева от кредиторов

Serhiy Arbuzov

Inflation targeting will finish the Ukrainian economy, said the former head of the NBU.

The NBU Council approved a convenient rule, but useless to revive the economy “Fundamentals of monetary policy in 2017 and medium term.” Thus the country has a formal inflation targeting regime that was willfully imposed by the national Bank last year, and its formation led to the devaluation and destruction of the banking system. Commented on the adopted document, the former head of NBU, former first Deputy Prime Minister Sergei Arbuzov on his page in Facebook.

“The conflict in the media between Council members, experts and representatives of the NBU allowed cautious hope for change. Moreover, the Prime Minister repeatedly urged the Bank to introduce real credit to the economy. The miracle did not happen. The proposal of the head of the NBU Council crashed on a post among latter-day experts”theorists” executed by international grants. The latter began to convince all, that we are talking about primitive issue, which, of course, wrong. Thought Danylyshyn was quite common. The losers, as always, Ukraine”, – he wrote.

According to Arbuzov, inflation targeting will result in jumps in the exchange rate, inhibition of economic growth, sluggish lending.

“The main instrument of monetary policy of the selected key rate. But it is still not working in Ukraine, as the large informal sector (about 50% of GDP), a lot of cash is circulating in the community and, therefore, the Central Bank is difficult to influence them. The stock market is extremely underdeveloped, and banks and two years after the beginning of the “cleaning”and did not trust each other,” recalled the former head of the national Bank.

In his opinion, under such conditions, the NBU Council only preserved Ukraine’s dependence on official creditors, especially the IMF. In this economy, will remain an acute shortage of money that will continue to depress economic growth.

Urusov previously stated that the nationalization of PrivatBank changed the structure of the financial system of Ukraine.

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