, and a pick - up in investment activity, as uncertainty about the political situation diminishes. after widening to 3. 6 % of gdp in 2018, the current account deficit will range between 3 % and 4 % of gdp in 2019 and 2020. in 2019, the deficit will narrow to 3. 1 % of gdp, due to the 2018 bumper corn harvest and a drop in energy prices. in 2020 – 2021, the current account deficit will widen slightly, on the back of a decrease in gas transit, a poorer grain harvest, and a rise in investment imports after the elections. a widening in the trade deficit will be offset by greater private remittances, supported by the higher incomes of labor migrants. a key assumption of the macroeconomic forecast is that ukraine will continue to cooperate with the imf and enjoy relatively favorable access to the international capital markets. 2 / 3 bis central bankers'speeches at the same time, reasonably high interest rates will contribute to the inflow of debt capital, which, together with continued inflows of foreign direct investment, will finance the current account deficit. external official borrowing and the government ’ s placement of eurobonds will make it possible to repay external public debt, the repayments of which will peak in 2019 – 2020. this will improve the expectations of economic agents and promote macrofinancial stability. as a result, international reserves will hover around usd 21 billion in 2019 and 2020. the usual increase in uncertainty during presidential and parliamentary elections poses the main risk to the said macroeconomic forecast, including ukraine ’ s ability to meet its inflation target in 2020. this, in turn, could affect inflation expectations. external risks are also important. these include : a more significant slowdown in the global economy, including in the economies of ukraine ’ s main trading partners ; a drop in the global prices of the commodities exported by ukraine ; persistently strong labor migration and the resulting pressures on wages ; geopolitical risks, such as an escalation of the azov sea conflict, which could cut export earnings ; uncertainty over the volume of gas transit through ukraine starting in 2020, as pipelines bypassing the country are being built to deliver gas to europe. why did the board decide to leave the key policy rate unchanged? taking into account the updated macroeconomic forecast and the above risks, the nbu board deems it necessary to maintain the existing reasonably tight monetary conditions in order to ensure that inflation returns to its target range in q1

2020. what will the nbu ’ s monetary policy stance be in future? any further changes to the key policy rate will depend on inflation developments, as well as on whether or not risks to price stability materialize. the board sees reasons for launching a monetary easing cycle, as risks of inflation decrease steadily, and inflation returns to its target, along the trajectory outlined in the central bank ’ s new macroeconomic forecast. however, if underlying inflationary pressures rise and risks that inflation may not return to its target increase, the nbu could raise the key policy rate. a new detailed macroeconomic forecast will be published in the inflation report on 7 february. a summary of the discussion by monetary policy committee members that preceded this decision will be published on 11 february. the next meeting of the nbu board on monetary policy issues will be held on 14 march. thank you for your time! 3 / 3 bis central bankers'speeches