NBU predicts in 2017, the relatively stringent foreign exchange restrictions

The NBU promises to soften in 2017 monetary policy to abolish the currency restrictions, but the “monetary conditions remain relatively tight to ensure a further reduction of inflation in accordance with the adopted inflation targets: 8% (plus/minus 2%) by the end of 2017 and 6% (plus/minus 2%) by the end of 2018.”

This is stated in the inflation report of the Bank for January.

“Monetary policy easing will slow down because of the focus on achieving the inflation target. The steady decline of inflationary pressure against the background of further reduction of risks to price stability allowed the National Bank in 2016 and has consistently and actively ease monetary policy – the discount rate was reduced six times from 22% to 14%. This was reflected in a corresponding reduction in short-term interest rates in the interbank market and ensure lower interest rates on government bonds and retail rates of commercial banks on deposits and loans. In General, however, real interest rates remained relatively high, which contributed to the continued inflow of deposits into the banking system, especially in the national currency”, – said the NBU.

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The regulator States that “lending activity remained weak, which was primarily due to the high risk and akreditasyonu the real sector. Under the baseline scenario, in response to the growing risks of inflation and slowing down the process of improving inflation expectations, the national Bank will be forced to implement a more restrained monetary policy easing in 2017”.

The national Bank also predicts that due to the increase in the minimum wage without work can remain 630 thousand people. While the inflation will amount to 9.1%, which is 1.1% more from the baseline scenario, although the margin of error.

We will remind, in 2016, inflation was 12.4% and in 2015-m – 43,3%.