is that ukraine will receive a total of usd 45 billion in financial aid loans and grants this year. these disbursements remain the main source of covering the high budget deficit, which stands to widen to almost 29 % of gdp this year. through aid, ukraine has also been able to finance its considerable current account deficit, and the nbu has maintained a high level of international reserves and balanced the fx market. ukraine's needs for external financing in the years ahead will remain significant despite the gradual mobilization of domestic financial resources and fiscal consolidation. 2 / 4 bis - central bankers'speeches an important assumption underlying the forecast remains the sufficiency and regularity of such aid, which requires that ukraine meet its commitments to international partners. this will make it possible to finance the budget's critical expenditures and avoid having to rely on monetary financing, going forward. for its part, the nbu will be able to maintain international reserves at above usd 40 billion despite making significant interventions to preserve the sustainability of the fx market amid further currency liberalization measures, among other things. the key risk to the forecast is the longer duration and the unpredictable nature and intensity of the war the war continues. the nbu has revised its main assumption regarding the longevity of high risks to security. the updated forecast envisages that they will persist until at least the end of 2024. uncertainty over the length of the war remains high. an expedited end to the war would promote faster economic growth and eliminate a large part of the inflationary risks. by contrast, if security risks were to persist for longer than currently expected, they could lead to additional losses of ukraine's economic potential and heavier inflationary pressures throughout the forecast horizon. the following risks also remain relevant : decreased or less regular disbursements of international aid emergence of additional budget needs to maintain defense capabilities and substantial quasi - fiscal deficits, in the energy sector in particular significant damage to port and energy infrastructure that will restrain exports adverse trends in migration. in contrast, the implementation of large - scale reconstruction projects in ukraine could help accelerate the economic recovery significantly. what is more, economic growth in the short run may be quicker than expected, if the capacity of sea export routes increases more significantly. taking into account the balance of risks and the need to continue to ensure that hryvnia - denominated assets are highly attractive, especially as fx market participants adjust to the managed flexibility of the exchange rate, the nbu board has decided not to

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, 14 december 2023. * * * dear colleagues, today the board of the national bank of ukraine has decided to cut the key policy rate to 15 % effective 15 december 2023. this decision comes along with a decline in inflation and an improvement in inflation expectations, which will contribute to sustained attractiveness of hryvnia savings instruments. in november, inflation declined slightly faster than expected, to 5. 1 % the slowdown in inflation was driven by an increase in supply of food products from the new harvest as well as by an improvement in expectations brightened by the stronger hryvnia exchange rate. the stronger hryvnia also made core inflation decline faster than expected by the nbu. the nbu estimates inflation readings in december to remain close to the current levels. at the same time, the risks that inflation might accelerate are persisting due to logistical problems at western borders and effects from large harvests waning faster. the adaptation to managed flexibility of the exchange rate has been successful the fx market remained sustainable after the introduction of the new exchange rate regime. demand for foreign currency spiked only in the first days of the managed flexibility regime, and the balance of supply and demand improved after that. this also led to a decrease in the nbu's net fx sales. in november, the balance of the nbu's interventions was usd 2. 5 billion, which was less than in previous months. as declared, every day the nbu covered the structural deficit of foreign currency, letting the hryvnia exchange rate sway in either direction influenced by changes in supply and demand. the new exchange rate regime resulted in a notable pickup on the interbank market, in particular by boosting volumes of transactions between the banks without the nbu's participation. an increase in the depth of the fx market is important for reducing its susceptibility to situational factors and for improving exchange rate sustainability. moreover, the link strengthened between the cash and cashless segments of the fx market as restrictions were lifted for the banks to sell cash foreign currency to households. 1 / 3 bis - central bankers'speeches the nbu will remain active on the fx market the structural deficit of foreign currency will persist due to the consequences of the war.