“Today, the National Bank of Ukraine has raised the discount rate to 15.5%. The official reason is high inflation. UA.News addressed the commentary on economists to find out their thoughts on this. This decision was predictable, and the measure itself is forced in the current conditions. This opinion was expressed by the economist, director of the Economic Discussion Club Oleg Pendzin. “At present inflation”, – WRITE ON: ua.news
Today, the National Bank of Ukraine has raised the discount rate to 15.5%. The official reason is high inflation.
UA.News addressed the commentary on economists to find out their thoughts on this.
This decision was predictable, and the measure itself is forced in the current conditions. This opinion was expressed by the economist, director of the Economic Discussion Club Oleg Pendzin.
“To date, inflation in Ukraine is much higher than expected at the National Bank and the Ministry of Economy. Therefore, the regulator is forced to introduce appropriate precautions. I am absolutely sure that when we look at inflation, there will be more than 13%. More even than the official figure. That is, the NBU is trying to stop inflationary processes. They are caused by both poor harvest, energy problems, and wages, and so on. That is, all these things have not gone anywhere. So what is happening is obvious and expected. Everything should be. For example, in the Russian Federation, their Central Bank holds a rate of 21%, ”Oleg Pendzin said.
Economist Yuri Gavrilechko, on the contrary, sharply criticizes the NBU’s decision. He believes that in the current conditions, the rate should be reduced, not lifted.
“Let’s look at the National Bank’s forecasts. In recent years, 10, they have never coincided with reality when the case concerned inflation. That is, it is a forecasting “finger in the sky”. Because the National Bank cannot be mistaken for 10-50%for 10 years. This is nonsense. Accordingly, since inflation significantly exceeds the NBU, the latter has traditionally decided that something needs to be done. And “doing something” is to try to restrain inflation at the expense of the discount rate. This is a very false idea that has never worked in life … In open economies.
Increasing the rate is an increase in the value of money, and therefore lending. Therefore, prices and tariffs as a consequence. Because entrepreneurs who take out the interest will be forced to raise the price of their own products … In the theory of raising the discount rate can help curb inflation, if its nature – in the presence of a large amount of unsecured commodity mass in the domestic market. This is called “demand inflation”. Did you see a lot of money from Ukrainians somewhere? Two thirds of Ukrainians are poor. They live less than $ 5 a day. How will in such circumstances be the demand inflation? I do not understand, ”says Gavrilechko.
According to the expert, Ukraine’s inflation is in Ukraine today. Prices are rising through state policy on tariff formation, especially in the gas industry and in the field of electricity. Accordingly, we have the opposite cause of inflation, which is overwhelmed: by reducing the discount rate.
“We do not need to freeze the economy, we need to warm it up by reducing the bet. And so the state is forced to increase interest on public securities. That is, public debt will grow rapidly, primarily internal. It is nominated in UAH, but to extinguish it, the government will be interested in higher inflation. Therefore, the increase in the rate will lead to a rapid increase in public debt and greater concentration of capital in the non -productive sphere. That is, as a result, inflation will increase even more, increase public debt, and money will flow from the production sphere into financial sphere, ”Yuri Gavrilechko summarized.
But the candidate of economic sciences, an economist with 10 years of experience in the NBU Vadim Orphan to raise the discount rate is ironically. He compares Ukrainian inflation with the weather forecast in the smartphone: “On the street +5, and it is felt like -2.”
“Here we have official inflation, and there is a reality that everyone feels when going to the store or when he looks into his pocket. The reasons for its primarily household. It is an increase in utilities prices, electricity, for the supply of individual goods, for transport, gasoline and so on. Of course, we have and actually hidden printing of funds, there are social obligations at the expense of the measure of the event, we have a money supply that can be considered excess: the economy does not work, so no one to lend … so inflation is caused by factors that are outside the monetary policy … And further increase this year, ”the orphan said.
The expert at the same time is not sure that in this way he will be able to achieve any great success. And the consequence will be the increase in the profit of Ukrainian banks.
“In February, the NBU announced an overview of the banking sector. Again, during the war, record profits from banks: UAH 103.7 billion. And this is still 50 IMF% income tax. Therefore, our banks should read lectures on how to make money … Anti-inflationary moment in raising the rate is available, I will not be critical here. But all this does not transform into deposits, it does not stimulate savings – and in the conditions of war we need to create savings. It is the base of military economy and military Keynesianism. The rate of the rate should be theoretically made more profitable certain objects for investment. But, as we see, did not do, ”Vadim summarized.
Earlier, at the end of January, the NBU had already raised the discount rate.
