by introducing tough capital controls. the exchange rate started to play the role of a nominal anchor for expectations, and went on to become the main instrument for curbing inflationary pressures and ensuring macro - financial stability in ukraine. 3 / 7 bis - central bankers'speeches the nbu also adjusted the operational design of its monetary policy, taking a set of crisis measures to mitigate risks to financial stability. specifically, the liquidity of the financial system was boosted significantly. due to the strong psychological pressure caused by the war, changing the key policy rate was unlikely to stabilize expectations and maintain control over inflation. from february through may 2022, the nbu postponed key policy rate decisions, keeping the rate at 10 %. in addition, in the earliest days of the war, the nbu deployed a wide range of measures to support financial institutions and borrowers, so as to stabilize the financial sector. moreover, to ensure the uninterrupted funding of critical public expenditures, the nbu has been supporting ukraine's state budget via purchasing government debt securities. so far, the nbu has purchased government bonds worth a total of uah 315 billion ( around $ 10 billion ). i expect that everyone in this room understands that this mix of a massive injection of liquidity via the budget and banking system, a fixed exchange rate supported by interventions and capital controls, and a freezing of the key interest rate helps the banks, businesses and households to adjust to the new reality in the short - term, but this mix is not sustainable in the long - term. that's why we started to adjust our policies. first, the nbu started to withdraw liquidity support measures for banks. second, at the beginning of june, the nbu raised the key policy rate considerably, to 25 %, to boost the attractiveness of assets priced in the national currency, and ease pressures in the foreign exchange market. then, as depreciation pressure remained too strong to withstand, in late - july the nbu made a one - time 25 % adjustment to the official exchange rate. relatively tight monetary conditions and this re - pegging of the exchange rate have helped weaken the pressure on ukraine's fx reserves. together with an acceleration of international aid inflows, this has allowed to maintain our reserves at a relatively comfortable level. all of these steps have helped us to avoid monetary destabilization so far. in september, inflation in ukraine stood at 24. 6 per cent. other countries have

sergiy nikolaychuk : ukraine's economy and the prospects for its recovery special intervention by mr sergiy nikolaychuk, deputy governor of the national bank of ukraine, at the 10th nbp annual flagship conference on the future of the european economy ( cofee ), 21 october 2022. * * * 1. introduction dear colleagues, first of all, i am greatly honored to speak at this event hosted by narodowy bank polski, a true friend of the national bank of ukraine. today, i'm very pleased to share my view of the ukrainian economy in these challenging times, and on how the authorities'policies, events on the battlefield, and international aid might affect ukraine's economic prospects. clearly, our capacity at this time to project the economic future is extremely limited. however, we must deal with this challenge, along with the many others we currently face. that is because in the near - term we need a macroeconomic framework in order to calibrate our policies for keeping the ukrainian economy alive and on a sustainable path for the duration of the war, as well as to ensure that scarce resources are allocated efficiently. then, for longer - term, we need a vision of the economy that we would like to build. this vision should shape our structural policies and reforms. so, let me start by briefly reviewing the economic situation and the short - term outlook, and then consider some of the policies for shaping the economic landscape in the medium - term. 2. war effects the war has affected the country in a multitude of ways, including through creating a humanitarian crisis and active migration abroad – mostly to poland. this will influence ukraine's demographic development and labor market conditions for many years to come. the latest estimates show that around seven million ukrainians remain abroad, and the number of internally displaced persons is also almost seven million people a lack of money, and difficulties in finding housing and work remain the main problems of migrants – both abroad and inside ukraine. a large share of our refugees would like to return to their homes. but in view of the continuing security risks, an increase in the 1 / 7 bis - central bankers'speeches number of people returning is currently unlikely. according to surveys, only 13 % of refugees plan to return to ukraine within the next three months. and even before these latest attacks, the estimates of the direct damage done to ukraine's civilian infrastructure and other objects, and of general economic losses, were huge – in the