of its steps. we are confident that this cautious approach will bring us closer to our goals of longlasting macroeconomic stability and economic growth even under conditions of extreme uncertainty. in conclusion, i would like to underline the following. 3 / 4 bis - central bankers'speeches despite all the terrible consequences of war, our people have shown incredible resilience while the economy has successfully adapted to new conditions. preservation of macroeconomic, monetary, and financial stability facilitated heavily this adaption. the current macroeconomic situation is conducive to carefully embark on the path of mp normalization. in fact, we have already implemented some measures of the fx liberalization roadmap and are progressing on creating final preconditions for return of er flexibility. at the same time, the support of international partners, both financial and military, remains crucial for ukraine's macroeconomic stability and quick post - war recovery. that's also important for macroeconomic performance of the whole region of cesee and of the whole world. again, thank you very much for your unwavering support. 4 / 4 bis - central bankers'speeches

on corresponding accounts the allowance to fulfill some part of required reserves ( up to 50 % ) with eligible government bonds allowed us to push the revival of domestic borrowings and eliminate the monetary financing of the budget 2 / 4 bis - central bankers'speeches the nbu introduced 3 - month cds at preferential rate linked to the banks'retail term deposits stock. all that led to further increase of banks'deposits rates and increase in the share of term deposits in all deposits of households. this growing attractiveness of assets in national currency amid stability in fx market allowed us to reverse the inflation trend and bring it down significantly, to below 13 % in june from the highs of almost 27 % at the end of last year. however, inflation, especially core, is likely to show persistence moving forward, as in the region overall. here, i would like to underline that the headline inflation path was not out of line with the region's trends. that contrasts with monetary policy outcomes during the first wave of russia's invasion in 2014 – 2015. we expect that in the next years, inflation will decelerate further thanks to tight monetary policy ( mp ), subsiding security risks, proper recovery of logistics, and larger harvests. but bringing inflation to the target also has a long way to go, which in our case is complicated by extreme level of uncertainty, as just recently was confirmed by kakhovka hpp destruction by russia. this sole act is expected to add 0. 3 pp to annual cpi this year. presented success in stabilizing fx market and reducing inflationary pressures was in significant part determined by a fixed exchange rate regime supported by tight fx restrictions. however, over time, the costs of such framework could outweigh the benefits. first, it leads to increase in market distortions, expansion of the shadow economy, and the diversion of resources to unproductive uses. second, it pushes both stakeholders and market participants to internalize expectations of a fixed exchange rate and stimulates the accumulation of fx risks. finally, the economy is deprived of the opportunity to adapt to changes in external and internal conditions through exchange rate flexibility. thus, nbu has been actively working on creating proper conditions for gradual return to inflation targeting with a floating exchange rate. this ambition has been recently reflected in the strategy for gradual normalization of monetary policy developed with the imf personnel as part of eff conditionality. the strategy is primarily conditions - driven and heavy on assessment of risks from implementation