DECISION OF COUNCIL OF THE NATIONAL BANK OF UKRAINE

of January 31, 2017 No. 2-rd

About approval of the Procedure for development of the Basic principles of monetary policy and control of its carrying out

Council of the National Bank of Ukraine solved:

1. Approve the Procedure for development of the Basic principles of monetary policy and control of its carrying out, taking into account results of discussion at meeting of Council of the National Bank of Ukraine on January 31, 2017 which is applied.

2. Publish the Procedure for development of the Basic principles of monetary policy and control of its carrying out on the page of Official Internet representative office of the National Bank of Ukraine.

3. The decision becomes effective from the date of its acceptance.

Approved by the Decision of Council of the National Bank of Ukraine of January 31, 2017, No. 2-rd

Procedure for development of the Basic principles of monetary policy and control of its carrying out

I. General provisions and content of the basic principles of monetary policy

1. This Procedure is developed according to the Constitution of Ukraine, the Law of Ukraine "About the National Bank of Ukraine", Regulations of Council of the National Bank of Ukraine and determines content and procedure for development of the Basic principles of monetary policy and control of its carrying out.

2. The basic principles of monetary policy determine indicators of activities of the National Bank of Ukraine (further - National Bank) in the medium term for goal achievement of National Bank.

3. The basic principles of monetary policy are the document in which the strategy of monetary (monetary) policy of National Bank is reflected, including the priority purpose, tasks, features of communication and realization of monetary policy for the medium term (3-5 years), the principles of use of its tools and mechanisms are determined, features of tendencies in the world markets, nature of their influence on the Ukrainian economy, the corresponding specifics and the directions of accomplishment by National Bank of its functions, macroeconomic indicators and indicators of activities of National Bank, possible neighboring risks and general approaches to their leveling are considered.

4. The basic principles of monetary policy are developed on accomplishment of the functions of National Bank determined by article 6 of the Law of Ukraine "About the National Bank of Ukraine" namely:

ensuring stability of monetary unit of Ukraine, proceeding from priority of achievement and maintenance of price stability in the state;

assistance of financial stability, including banking system stability provided that it does not interfere with goal achievement on maintenance of price stability in the state;

assistance to respect for steady rates of economic growth and support of economic policy of the Cabinet of Ministers of Ukraine provided that it does not interfere with goal achievement, determined in paragraphs second and third this Item.

5. The basic principles of monetary policy are the strategic document which is developed annually and shall contain:

1) purposes, tasks and target reference points of monetary policy the next year and the medium-term period;

2) basic principles of activities of National Bank relatively: ensuring realization of particular purposes and tasks of monetary policy, use of its tools and mechanisms; politicians of exchange rate formation mechanism and currency control; ensuring financial stability, use of tools of macroprudential policy and neutralization of systemic risks;

3) brief summary of condition and main economic trends of Ukraine, its financial and monetary sphere;

4) the expected changes of external and internal economic factors and their influence on condition of the monetary market;

5) main forecast indicators of economic development, monetary sphere the next year and the medium-term period;

6) determination of the main risks and threats on ensuring price and financial stability, and also effective development of economy.

6. In case of development of the Basic principles of monetary policy the macroeconomic indicators calculated by the Cabinet of Ministers of Ukraine and National Bank and also other necessary information are used.

7. Council of National Bank can make changes to the Basic principles of monetary policy:

in case of contingencies which make impossible accomplishment of the Basic principles of monetary policy in the medium term, including for the reasons, independent of National Bank;

by results of meeting of Council of National Bank concerning control of carrying out monetary policy and its influence on condition of social and economic development of Ukraine.

8. The basic principles of monetary policy and the decision of Council of National Bank for the questions determined by Items 3, of 4, of 6, 8-10, 12, of 15, of 17, of 18, of the 20th article 9 of the Law of Ukraine "About the National Bank of Ukraine" are obligatory for accomplishment by Board of National Bank.

II. Development of the basic principles of monetary policy

9. The project of the Basic principles of monetary policy is developed based on the offers provided by Board of National Bank.

10. The board of National Bank annually till July 31 represents to Council of National Bank of the offer on development of the Basic principles of monetary policy which contain the materials specified in Item 5 of this Procedure and also analytical, statistical, forecast and information materials, in particular:

reasons for the offered purposes and tasks of monetary policy with forecast scenarios of monetary and macroeconomic development of the country, based, including on use of methods of economic-mathematical modeling;

realization of monetary and fiscal policy;

economic and social development of Ukraine;

conditions of paying balance and external debt of Ukraine;

developments of the monetary market, mechanisms and instruments of its regulation;

obligations, conditions and condition of accomplishment of programs with international financial institutions which directly concern carrying out monetary policy;

tabular information, in particular:

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