National Bank Says It Controls Market

Real GDP registered 9.1% growth in January 2001, National Bank of Ukraine (NBU) Governor Volodymyr Stelmakh announced disclosed on February 15. Inflation was 1.5%, a threefold drop from January 2000. If inflation keeps a 3.0-3.5% rate to the end of the first quarter, this will testify, according to Mr. Stelmakh, to our correct monetary policy. Yet, the NBU chief thinks the target annual inflation rate of 13.6% is very hard to achieve, so we must only hope that the January figure will remain steady in the coming months.

“There are economic foundations today for the national currency to strengthen,” Mr. Stelmakh said confidently. Moreover, this does not depend on IMF loans: he pointed out that last year showed we must rely above all on our own resources. NBU hard-currency reserves, $1.628 billion as of the end of last year, have now reached $1.783 billion.

“The available set of instruments makes it possible for us to maintain the targeted exchange rate indices under both optimistic and pessimistic (in case the IMF holds back loans — Ed.) scenarios,” Serhiy Yaremenko, director of the NBU department of currency regulation, believes. In his opinion, there are no economic reasons now why the NBU should modify its chosen course of hryvnia stabilization: “We see the likely changes on the market and are ready to handle them adequately.”