NATIONAL BANK CHANGES MONETARY REGULATION INSTRUMENTS RATES "FOR INCENTIVE PURPOSES"

The Executive Committee of the National Bank adopted a number of stimulating measures of the monetary policy aimed at achieving the main goal of the regulator.

According to the NBM, it primarily concerns the base rate applied to the main operations of the short-term monetary policy, which, as in August, was reduced by 0.25 percentage points - to a new historical minimum of 2,75%.

Interest rates on overnight loans have been reduced by the same amount - to 5.25% and on overnight deposits - to 0.25%.

As for the required reserve ratio at the expense of attracted funds in freely convertible currency, it will be increased by 1.5 percentage points for application periods from October 16 to November 15 and from November 16 to December 15 - up to 30% of the calculation base.

According to the Executive Committee, the decision will additionally balance the use of this instrument of monetary policy to optimize financial intermediation in the banking sector and strengthen the transmission mechanism of monetary and foreign exchange policy.

By these decisions, according to the executive committee, the NBM “uses the entire arsenal of monetary policy instruments to keep inflation in the range of a five percent annual target figure, due to sustainable economic activity, but to support and enhance this effect, other stimulating measures are needed, including fiscal, budgetary, structural ones."

The next meeting on monetary policy will take place on October 30.