“Seven of the 11 members of the monetary policy committee of the National Bank of Ukraine at the meeting on December 12 supported the increase of the discount rate to the level of 13.5% per annum from December 13, while two of their colleagues were in favor of keeping it at the level of 13%, and two more – in favor of raising it to 14%.”, — write: epravda.com.ua
Seven of the 11 members of the monetary policy committee of the National Bank of Ukraine at the meeting on December 12 supported the increase of the discount rate to the level of 13.5% per annum from December 13, while two of their colleagues were in favor of keeping it at the level of 13%, and two more – in favor of raising it to 14 %. This is stated in the results of the monetary policy committee discussion. “They characterized such a step as balanced in the current environment, given the temporary nature of the main drivers of the current acceleration of inflation and the persistence of inflation expectations. In their opinion, the increase in the discount rate by 0.5 percentage points (bp) at the December meeting together with measures to maintain the stability of the foreign exchange market will be quite sufficient to demonstrate the readiness of the NBU to curb price pressure, which will calm the expectations of economic agents,” the message states.Advertisement: At the same time, two members of the committee who were in favor of keeping the interest rate at the level of 13% per annum, considered it inexpedient to increase it in view of the likely short-term nature of the price surge, the time lag of monetary transmission and the stability of inflationary expectations. Their colleagues, who considered it necessary to increase the discount rate more boldly in December – up to 14% per annum, argued their position that the NBU should act urgently and decisively, taking into account the rapid growth of inflation, which, in their opinion, is increasingly showing signs of sustainability , creating a threat of an “inflationary spiral”. “These members of the KMP emphasized that the discussion about the “non-monetary” nature of the engines of inflation is exclusively theoretical, but in practice it may even be harmful, as it threatens to delay the appropriate reaction,” the message states. the decision to increase the discount rate by half a percentage point to 13.5%.