andriy pyshnyy : national bank of ukraine press briefing - monetary policy decisions speech by mr andriy pyshnyy, governor of the national bank of ukraine, at a press briefing on monetary policy decisions, kyiv, 19 september 2024. * * * dear colleagues, the board of the national bank of ukraine has decided to keep its key policy rate at 13 %. this decision will help gradually bring inflation back to the target of 5 % in the coming years and support the sustainability of the fx market. inflation has expectedly accelerated in recent months in august, consumer inflation rose to 7. 5 % in annual terms, which was close to the forecast the nbu made in july. the underlying inflationary pressure, measured by core inflation, also increased to 6. 5 %. the growth in consumer prices was driven by the impact of lower harvests, businesses'larger expenses, and the effects of the weakening of the hryvnia in the previous months. however, inflation expectations remained rather sustainable. the pressure on prices will persist in the near future, but inflation will slow next year inflation will rise moderately in the coming months due to an increase in aggregate demand against the backdrop of budgetary spending, businesses'larger expenses on wages and electricity, and higher excise taxes. however, the nbu's prudent monetary policy and lower external price pressures will contribute to a gradual decline in inflation and its return to the target of 5 % in the coming years. to meet the target, the nbu will, in particular, maintain a manageable situation on the fx market. international reserves are being kept on a level sufficient for ensuring the sustainability of the fx market in august, ukraine received a large amount of international financial assistance. at the same time, the nbu's interventions to sell foreign currency declined substantially on the back of a decrease in net demand from businesses and households. as a result, ukraine's international reserves exceeded usd 42 billion as of the start of september. the staff level agreement on the fifth review of the imf program reached in september was another positive signal that volumes of international assistance will continue to be sufficient and macrofinancial resilience will be maintained. 1 / 3 bis - central bankers'speeches considering the above and the sufficient set of available instruments, the nbu will remain fully capable of supporting the sustainability of the fx market, prevent excessive exchange rate fluctuations, and ensure that the exchange rate moves both ways.

that access to the international capital market has, on balance, bestowed enormous benefits on participating countries, particularly developing countries. the world is a much better place when it is outward looking - historical epochs where large international transfers of capital were taking place were those where living standards around the world were rising fastest and where poverty declined most. i, for one, would be saddened if a number of countries responded to the current turmoil in international markets by cutting themselves off from the international marketplace thereby forgoing the benefits that the use of foreign savings can bring. it goes without saying that australia is completely happy with its policy of permitting the free movement of international capital and sees no case for any change. on the other hand, it is simplistic to insist on the totally free movement of capital in all countries and in all circumstances. to do so would be to ignore the lesson from recent crises, to further risk the stability of the system and to invite a reaction which would make us all worse off. we need to devise a system for maximising the benefits to be gained from international capital while limiting the risks. for example, i think chile was probably quite wise, and certainly within its rights, for a time to impose a tax on capital inflow which impinged most severely on very short - term flows. ( note, however, that chile did not impose controls on outflow. ) like chile, the world economy has to reach a proper balance, and i think there is increasing recognition that it will involve a few trade - offs. within developed countries, a number of institutions have been designed to encourage investment and risk - taking - the joint stock company, the concept of limited liability, bankruptcy laws and, of course, central banks as lenders of last resort. these are all accepted as necessary parts of a developed financial system, and help provide the right balance between encouraging enterprise while at the same time preventing individual financial distress from turning into widespread financial panic. all these things, by the way, have the by - product of creating an element of moral hazard. internationally, on the other hand, despite all the talk of globalisation, a borderless world and the integration of financial markets, there has been a reluctance to go very far down the path of finding an international equivalent to the bankruptcy laws or the lender of last resort. the main objections have traditionally been that it would interfere with the free movement of capital and that it would create a moral hazard. that attitude now appears to be changing