Reduction of inflation target in near future may be premature step – NBU

Reducing the inflation target of the National Bank of Ukraine (NBU), which is currently 5%, may be a premature step in the near future, the press service of the regulator said on Facebook.

"To reduce inflationary expectations of business and the population … central banks usually keep the inflation target at the same level for many years. If during this time the central bank shows the ability to achieve its goal, it gains the trust of business and the population, and this has a positive effect on the development of the economy. And then the goal can be revised downward," the report says.

It is noted that the central bank's inflation target of 5%, which was set by the NBU Council five years ago, was achieved only last year.

As reported, the head of the macroeconomic research department of ICU Investment Group, Serhiy Nikolaichuk, noted in early August that the NBU Council needs to think about reducing the inflation target of the regulator, since the 5% level of the indicator is one of the highest in the world – among 39 countries with an inflation targeting regime (like the Ukrainian central bank), while only Ghana has a higher target (8%).

Source: www.en.interfax.com.ua