yakiv smolii : national bank of ukraine press briefing - monetary policy statement speech by mr yakiv smolii, governor of the national bank of ukraine, at a press briefing on monetary policy, kyiv, 24 october 2019. * * * dear colleagues, please be informed that the board of the national bank of ukraine has decided to cut the key policy rate to 15. 5 % per annum effective 25 october 2019. the nbu continues the cycle of monetary policy easing as inflation is steadily declining towards the target of 5 %. what price developments followed the last monetary policy meeting? in september, consumer inflation declined to 7. 5 % yoy, below the nbu ’ s july forecast. inflation continued to slow in october according to the nbu ’ s preliminary estimates based on online analysis of prices. the steady disinflation has been driven by a gradual easing of underlying pressures on prices. that was reflected in a rapid slowdown of core inflation. the tight monetary policy was one of the reasons behind the strengthening of the hryvnia and improvement in inflation expectations. with a time lag, that produces a major impact on prices, offsetting the effect of the sustained consumer demand and worse harvest of some vegetables, which push prices upwards. what will be the future trajectory of inflation? same as before, the nbu expects inflation to decline to 6. 3 % as of the year - end. on the one hand, core inflation will slow more than expected, while fuel prices will remain below last year ’ s levels due to the stronger hryvnia. on the other hand, smaller supply of some vegetables will push prices upwards. however, these factors will offset each other, which leaves this year ’ s inflation forecast unchanged. inflation will meet the target range of 5 % + / - 1 pp in early 2020 and reach the medium - term target of 5 % at the end of 2020. as in 2019, tight monetary conditions will curb price growth. despite the fact that the key policy rate is reduced gradually, its real value will remain high on the back of improved inflation expectations. relatively high real interest rates will keep hryvnia financial instruments attractive for investors and thus support the exchange rate of the national currency. as a result, the more favorable fx market will neutralize the pressure domestic demand has on prices, which will be somewhat higher according to the new forecast. other factors behind the gradual disinflation will include : a prudent fiscal policy

for more well designed solutions that extend beyond readily available products. conclusion before i end my remarks, i would like to touch on the importance of calibrating trade finance processes with digitalisation. the world bank ’ s islamic trade finance report recognises this as a priority area and calls for enhancements to online islamic trade finance supply chain financing, and the use of blockchain technology. such technological advancements that leverage distributed ledger technology and api - enabled trade finance platform can address long - standing issues in trade finance operations that mainly arise from the voluminous and manual nature of trade finance processes. this could also potentially reduce the cost of trade finance of which according to w to, has surged by 30 % on average over the past year as well as eliminate fraud and increase transparency. the bank, in recognising the potential of digitalisation in advancing the delivery of meaningful access to consumers, provides an enabling environment for financial institutions to foster innovation through the fintech regulatory sandbox and facilitation of pilot projects. such avenues enable us to identify potential adjustments or responses to the existing regulatory framework, commensurate with the risk and scale of activities. one such initiative is the development of proof - of - concept for double invoicing detection carried out by selected financial institutions, which is now being enhanced by paynet for commercial use. in closing, i would like to share an excerpt from the book of ( musnad ) of ibn hanbal – the prophet ( peace and blessings be upon him ) was once asked about the best kind of earnings, of which he replied, “ that for which a man works with his hand. and honest trading. " 6 trade is held in such high regard in islam, and hence we should always strive towards betterment in its execution. thank you. 1 source : matrade article, 29 july 2021, “ double - digit growth in exports in major markets ” 2 source : world bank islamic trade finance report 2021. 3 / 4 bis central bankers'speeches 3 source : world economic forum article, april 2021, “ economists support ‘ immediate and drastic action ’ against climate change ” source : standard chartered ( june 2021 ). “ carbon dated : multinational companies planning to cut suppliers by 2025 for failing to curb carbon emissions ”. 5 source : miti ( april 2021 ). “ investment policy reforms to be rooted in the national investment aspirations ( nia ) ”, media release and mida ( may, 2021 ). “ malaysia is shifting