Eng 
Укр Record low inflation prompts the NBU to cut the discount rate - banker
Менеджер з розвитку АУБ
The record low inflation in March, which in annual terms does not exceed 3.2%, will lead to further cuts in the NBU's key policy rate, which in turn could be a good incentive for the development of bank lending. This was stated by Serhiy Mamedov, Chairman of the Board of GLOBUS BANK, speaking at the Recovery Construction Forum Ukraine.
“The development of lending will depend on the economic situation, because the availability of loans is commensurate with the cost of funds borrowed for lending. In other words, the market needs further cuts in the key policy rate, to which lending rates are pegged. After the March cut in the key policy rate from 15% to 14.5%, there are good reasons to believe that this process will continue, and thus by the end of this year the volume of all types of lending, including targeted programs for SMEs, mortgages in the primary market, and car loans, may grow by another 10-15%,” he emphasized.
Referring to the National Bank's data, the expert noted that the banking sector is and remains a significant component of the country's monetary system. Last year, banks paid more than UAH 73 billion in income tax, which accounted for more than 51% of the total income tax revenues to the state budget. In addition, banking institutions invested UAH 202 billion in domestic government bonds, which is 38% higher than in 2022. In addition, the share of domestic government bonds repurchased by banks amounted to UAH 734 billion, which is 46% of Ukraine's domestic public debt.
“The banks' policy is well aligned with the NBU's strategy and creates the basis for active lending development,” Sergiy Mamedov emphasized.
He reminded that in 2024, the expected GDP growth could reach up to 3.6%, and overall inflation is not expected to exceed 9%. In addition, a rather moderate devaluation of the national currency is expected - up to 7% from the rates as of January 1.
The Head of GLOBUS BANK believes that the macroeconomic forecasts for 2024 are still being fulfilled, especially in the foreign exchange market, as since the beginning of the year there has been a slight devaluation of the hryvnia by an average of 2.5%. In his opinion, the NBU's monetary policy is quite effective and the national currency is not threatened by uncontrolled depreciation.
“This year, favorable conditions have been created for the banking sector to not only actively develop, but also feed the country's economy by intensifying lending and paying huge amounts to the budget. The banking system is quite robust and able to withstand any new challenges related to the war. However, it is important not to stay away from the needs of the Armed Forces and to contribute in every possible way to bringing the victory in the war closer,” summarized Sergiy Mamedov.
