Mon. Oct 4th, 2021

IMF NOTES THE SIGNS OF STABILIZATION OF UKRAINIAN ECONOMY

Ukrainian economy is showing signs of stabilization. However, in order to restore economic growth it is crucial to continue the balanced policy and structural and institutional reforms, the International Monetary Fund has said. According to IMF First Deputy Managing Director David Lipton, Ukrainian economy remains fragile, but encouraging signs are emerging.

He noted recent stabilization of the exchange rate, increase of domestic-currency retail deposits, as well as moderate pace of economic decline. Moreover, he added that restoring a sound banking system is the key for economic recovery. The strategy to strengthen banks through recapitalization, reduction of related-party lending, and resolution of impaired assets should be implemented decisively, he noted. Moreover, according to IMF representative, maintaining an appropriately tight monetary policy and building up official foreign exchange reserves will be critical to entrenching external stability and anchor inflation expectations. As deflation takes root, monetary policy can be carefully eased to support economic activity. Removal of administrative measures on foreign exchange operations should proceed in a gradual and sequenced manner, once the enabling conditions are in place, Lipton said.