LONDON (Reuters) -Bank of England Governor Andrew Bailey said on Friday that the Ukrainian central bank’s commitment to focus fully on price stability once security threats are lower was both credible and critical as he addressed a research conference in Kyiv.
“You have been very clear in public that after the security risks abate and appropriate macroeconomic conditions are established in place, you will return to conventional inflation targeting,” he said in his first visit to Ukraine’s capital.
“It is a very clear commitment to get back to the established regime. And it is being done in a way that is not only critical but it also – to my reading – is credible,” he added in his spoken remarks at the conference.
Earlier this month the Ukrainian central bank held its benchmark interest rate at 15.5%, ahead of data showing that the country’s inflation rate rose to an annual rate of 15.9% on the back of higher food prices.
Ukraine targets an inflation rate of 5% but also uses exchange rate policy instruments and currency restrictions that are not part of the routine toolkit of most Western central banks.
(Reporting by David Milliken; editing by William James)
