kyrylo shevchenko : national bank of ukraine press briefing monetary policy statement speech by mr kyrylo shevchenko, governor of the national bank of ukraine, at a press briefing on monetary policy, kyiv, 9 december 2021. * * * dear colleagues, please be informed that the nbu board has decided to raise the key policy rate to 9 % per annum. the decision is aimed at neutralizing the impact of additional pro - inflationary risks, improving inflation expectations, and ensuring steady disinflation toward the nbu ’ s target of 5 %. what price dynamics followed the previous nbu board meeting on monetary policy issues? the growth in consumer prices decelerated to 10. 9 % yoy in october. the nbu estimates inflation continued to decline in november. the decline was driven by : the vanished effect of the last year ’ s low comparison base better harvests gathered this year administrative decisions on public utility rates the strengthening of the hryvnia in previous months the impact of the nbu ’ s previous decisions to tighten its monetary policy. at the same time, disinflation was somewhat slower than the nbu had predicted in itsoctober forecast. the decline in inflation was restrained by : higher pressures on prices of an increasingly wider list of consumer - basket goods and services due to the rise in food and energy prices businesses ’ higher expenses on logistics and wages domestic consumer demand remaining robust despite a slight deterioration in consumer confidence and the quarantine restrictions. additional pro - inflationary risks have also materialized. first, rising geopolitical tensions are affecting prices of ukrainian assets and fx market conditions. second, global prices for natural gas and food exceed the nbu ’ s expectations and are likely to remain high in the coming months. third, higher global inflation is prompting leading central banks to step up their monetary policy tightening. in turn, this lowers investor interest in assets of emerging markets ( including ukraine ). moreover, emerging market central banks are also actively raising their rates. for example, yesterday the central bank of brazil hiked its rate by 150 bp, to 9. 25 % per annum. this means the competition for foreign capital is getting stronger among emerging markets. how will prices change further on? inflation will continue to decline gradually until the end of this year and throughout the whole of 2022. 1 / 2 bis central bankers'speeches this year ’ s record - high harvest and a correction in global prices will help decelerate food price inflation

stricter quarantine restrictions in ukraine and globally remains the main risk to macrofinancial stability 1 / 2 bis central bankers'speeches indeed, vaccination campaigns are already proving to be effective in some countries. however, they are being rolled out rather slowly, as a result of which the risk of tighter quarantine measures this year remains significant. in particular, some regions of ukraine have seen a significant rise in morbidity in recent months. therefore, the pandemic still poses the threat of a decline in business activity and a cooling of consumer and investment demand. this, in turn, could rein in inflation. conversely, the rapid recovery of business activity, rebounding commodity markets, the lagged effect of large - scale expansionary measures, and potential pent - up demand are generating risks of higher inflation globally. under such conditions, among other things, inflationary pressures from ukraine ’ s main trading partners could increase further. there are other significant risks. they include : volatile global capital markets a more dramatic deterioration in the terms of trade an escalation of the military conflict in eastern ukraine or on the country ’ s borders. given the above balance of risks and the significant rise in underlying inflationary pressures seen in recent months, the nbu board decided to raise the key policy rate, to 6, 5 %. what will the nbu ’ s monetary policy stance be in future? looking ahead, the nbu stands ready to raise its key policy rate more resolutely in order to curb underlying inflationary pressures, stabilize expectations, and bring inflation back to its target. the nbu remains committed to its duty to meet the inflation target. therefore, nbu monetary policy will continue to be aimed at preventing a spike in inflation. thank you for your attention! 2 / 2 bis central bankers'speeches