andriy pyshnyy : introductory speech - workshop on monetary policy in emerging markets introductory speech by mr andriy pyshnyy, governor of the national bank of ukraine, at the nbu - eabcn workshop on monetary policy in emerging markets, kyiv, 15 december 2023. * * * dear colleagues, welcome to our traditional workshop on monetary policy in emerging markets. for the third time, we gather to discuss the main challenges for central banks and outline ways to overcome them in emerging markets. first and foremost, i would like to express my gratitude to the euro area business cycle network ( eabcn ) for their support in organizing this event. for the second consecutive year, we are organizing this workshop together, and i sincerely appreciate our productive collaboration. this year, we have placed a special emphasis on understanding the causes and consequences of the new wave of inflation worldwide. the one that shook the world during the post - pandemic recovery and gained particular momentum after the onset of the war in ukraine. almost every country in the world has felt the new wave of inflation, with emerging markets being the most affected. this is confirmed by the economic outlook presented by the imf in october. according to the imf, in 2022, inflation in developed countries averaged 7. 2 %, while in emerging markets, it was 10. 1 %. in some emerging markets, inflation exceeded 20 %. among these countries is ukraine, where we observed a substantial inflationary surge driven by the escalation of the war. the causes of inflationary processes, and even more importantly, the nature of risks for its escalation, can vary significantly across different countries. it seems that inflation has attacked the world from all sides, and in each country, it is targeting the'vulnerable'points in defense : from both demand and supply sides through uncertainty and turbulence in global energy and food markets through structural fragmentation in labor markets and changes in production and supply chains through potential debt crises and financial destabilization ultimately, through the security risks and active military conflicts. 1 / 4 bis - central bankers'speeches all of these factors have presented distinctive challenges for central banks, particularly given the constraints of our toolkit. in particular, these challenges stem from structural liquidity surpluses, escalating debt burden, dependence on the policies of developed nations, and the dynamics of international capital markets. economic theory and practical experience have demonstrated successful strategies in addressing inflation. nevertheless, today we

push prices upward. the more rapid gdp growth seen in q2 2019 ( to 4. 6 % yoy ) was mainly driven 1 / 2 bis central bankers'speeches by a pick - up in domestic consumption amid a faster improvement in consumer sentiment. the preliminary estimates of july economic activity showed that sustained domestic demand had persisted. internal political risks to reducing inflation to its target decreased after the new convocation parliament started to operate and a new government was formed. this makes it possible to intensify negotiations on a new cooperation program with the international monetary fund. at the same time, there are still threats to financial stability arising from current court proceedings related to the decisions taken by the state to improve the health of the banking sector. external risks are also important. these include : a suspension of russian gas transit through ukraine starting in 2020 increased trade tensions and more turbulent global financial markets an escalation of the military conflict and new trade restrictions introduced by russia. what is the nbu ’ s current view of the future monetary policy stance? the nbu will continue the cycle of monetary policy easing, provided inflation is steadily declining to its 5 % target. how quickly the key policy rate is reduced to its neutral level of 8 % will depend on both internal and external risks. if structural reforms speed up, the nbu could cut the key policy rate more quickly. another important condition is inflation decreasing steadily to its target. conversely, if inflation risks materialize, in particular through persistent demand pressure, the easing of monetary policy will be more gradual. a summary of the discussion by monetary policy committee members that preceded this decision will be published on 16 september 2019. the next meeting of the nbu board on monetary policy issues will be held on 24 october 2019. thank you for listening! 2 / 2 bis central bankers'speeches