NBU named the conditions for reducing inflation to 5%: what it means for Ukrainians

According to НБУ: The latest important online dialogue from the Kyiv School of Economics drew attention to macroeconomic policy in the context of European integration. The Deputy Head of the NBU, Volodymyr Lepushynskyi, shared his thoughts on the reaction of monetary policy to future trends in Ukraine. In particular, various scenarios were discussed, including:

• Post-war uncertainty will remain at a high level with a new focus on investments.
• There are two extreme options for the investment trajectory that require a balance through economic and monetary measures.

“The NBU's monetary policy must adapt to EU standards while remaining flexible, but with a clear commitment to the inflation target. The inflation targeting regime remains optimal.”

Lepushynskyi also showed the necessary characteristics of monetary policy that will accelerate the process of further European integration:

• An inflation target of 5% is considered the best option for adapting to structural changes, but it may change in the future.
• The discount rate will become important again, and monetary tools will prove their effectiveness.
• The exchange rate will evolve to absorb various shocks, transitioning from managed flexibility to smoothness.

The vision of macroeconomic policy that promotes integration, security, and growth is relevant and can determine the future prospects for Ukraine's economic development.