State lost UAH 200 billion due to NBU policy – Gontareva
24 May 2024 13:14
The monetary policy of the National Bank of Ukraine during the full-scale war resulted in Ukraine losing UAH 200 billion. This was stated by former NBU Governor Valeria Gontareva in an interview with NV, according to "Komersant Ukrainian"
According to her, the National Bank artificially maintained the official hryvnia exchange rate for a long time, and after the dollar changed from UAH 29.25 to UAH 36.6 in July 2022, it continued to maintain it again and did not introduce gradual liberalisation.
“When the rate was raised in mid-2022, it was the right thing to do. But it was necessary to immediately begin currency liberalisation of the market and let the exchange rate go,”
– gontareva said.
“This was not done, which is why the real and nominal exchange rates differed significantly. The hryvnia was overvalued by 20%, Gontareva said.
In the budget for 2023, the Ministry of Finance had already budgeted for an exchange rate of 42 hryvnia to the dollar, but by October it was 36.6 hryvnia. When the NBU introduced “managed exchange rate flexibility”, the hryvnia depreciated, but it happened too late.
“Yes, the devaluation started, but you were late, just like with the interest rate cut. Delays are real costs for the country. I think that if we calculate all these delays, the wrong policy of the NBU has led to the fact that the Ministry of Finance and the whole country have lost about UAH 200 billion,”
– the former official said.
Gontareva believes that the exchange rate should be 42 hryvnia to the US dollar, but the NBU is holding back the depreciation of the hryvnia. The former head of the NBU believes that the National Bank should manage the exchange rate more flexibly, change the discount rate more boldly, and stimulate lending to the military sector.
