NBU has become hostage to its own policies

The National Bank of Ukraine is a hostage of its own policy of "monetary anchor" in which the emission parameters are determined not in the offices of the NBU, and the currency market. Such an opinion in an interview with The Mirror of the Week "stated the former head of the NBU Council Anatoly Galchinsky. According to him, now devalued one of the main instruments of monetary policy the central bank and must be spoken openly, because last year 99.4% growth in money supply amounted to operations in the foreign exchange market (in the balances indicators). In this situation, can not but worry and more, said A. Galchinsky: NBU limits its ability to perform one of its basic functions - to act a lender of last resort ". For example, he explains, the emission resources absorbed by the currency market. "From this suffering from the banking system, the economy in general" - lamented the former head of the Council of the National Bank. Another negative factor A. Galchinsky calls that loses its effectiveness and a key indicator of monetary policy - NBU discount rate. "In the West - is a key instrument of economic regulation," - he says. Responding to a question about "rolls over" we issue or not, A. Galchinsky as, of simple optimality criterion is proposed to use emission rate of inflation. "Last year, inflation was lower than projected. Draw your own conclusions," - he says. However, stresses the economist, is important and another indicator - the level of monetization (the ratio of broad money to GDP): "If it is below the optimal size, then a certain lag larger issue." "In the context of the discussion premiers (Azarov, Tymoshenko) can be called and the following figures: in 2005, while prime minister Yulia Tymoshenko, the money supply increased by 54,3%, which, naturally, could not but influence the inflationary pressures. This level of the most dangerous inflationary - cash issue raised in 2005 by 43%, whereas a year earlier - by 27% in 2003 - only about 8%. Last year, money supply grew by 22,8%. From a formal point view, this is a very impressive figure. I - a supporter of tighter monetary policy. Besides, the level of monetization of the economy is now close to its optimum - 53,3% (in Poland - 53,3, in Russia - 49,9%), "- he said. "But in this case I would be careful with the charges (against the National Bank of Big Issue)", - A. Galchinsky. As we know, January 18, former Prime Minister Yulia Tymoshenko said that Ukraine in 2010 godubyla held uncovered issue amounting to 99.671 billion USD. In response, the NBU said that the amount of net non-cash issue national currency in 2010 amounted to 35.5 billion UAH. And the Prime Minister Mykola Azarov, Tymoshenko called a misunderstanding of Ukrainian politics. Source: Ministry of Industry