NBU Approves 2008 Monetary Policy

The Council of the National Bank of Ukraine approved monetary policy for 2008, projecting the monetary base to grow 30-35% and estimating inflation at 9.6%. The policy provides for the UAH/USD exchange rate to fluctuate in a band of 4.95-5.25. Polina Khomenko: These projections, normally made in October, were delayed due to the extraordinary parliamentary election. The NBU is preserving its provision for money supply growth from 2007, and the exchange rate band also remains the same. We believe that the NBU will allow for more volatility within the range next year. Our inflation forecast is slightly less optimistic at 11.0%, as we see this year’s inflation drivers remaining strong into the beginning of 2008.