By KYIV. Dec 19 (Interfax-Ukraine) – Several members of the Monetary Policy Committee (MPC) of the National Bank of Ukraine (NBU) believe that the regulator could cut the key policy rate by 2-4 percentage points already in 2023, the NBU press service reported following the MPC discussion.
"Conversely, some MPC members believed that the NBU could start a monetary policy easing cycle earlier than envisaged in the October forecast. They expected that the key policy rate would be cut by 2 to 4 pp next year. Two of them said that they saw the grounds for easing monetary conditions in H1 2023," the NBU said in a press release.
The October forecast, which predicts that the key policy rate will stay at the 25% level until Q2 2024, is highly likely to materialize, most discussants said. High inflationary risks persist, and the objectives of the June hike to 25% are still relevant, they said.
Most MPC members agreed that pro-inflationary risks would continue to prevail in the coming months, and that, if realized, these risks would require the central bank to tighten monetary conditions in order to keep the exchange rate and inflation under control. Therefore, the NBU should continue to stick to its one-way communications in announcing possible monetary policy changes in the baseline scenario.
At the same time, several MPC members noted that the balance of risks was levelling off, and suggested that the NBU adopt symmetrical communications in declaring its future monetary policy stance.
