Zelensky's deputy chief of staff allows for monthly emission of up to UAH60 bln

MOSCOW. Aug 17 (Interfax) - The National Bank of Ukraine may compensate for the national budget deficit with the monetary emission of up to UAH60 billion under certain conditions, deputy chief of staff of the Ukrainian presidential office Rostyslav Shurma said, following the National Bank statement on the monthly limit of UAH30 billion.

"We understand from the estimates that if the export-import operations are balanced, the problem of sovereign debt repayment is resolved and international partners provide substantial support, there will be no problem with the monthly volume of UAH30 billion to UAH60 billion. This is the range that will not create any problems," the Ukrainian media quoted Shurma as saying in an interview with Forbes.ua on Tuesday.

Such conditions may include the unblocking of grain exports, the additional 10% commission on forex transactions in imports, and a high level of external financial support, Shurma said. "This means that the balance of payment is leveling off, so we will be able to support the budget with more than UAH30 billion a month without creating additional risks to the currency," he said.

Speaking of the public discourse between the National Bank and the Finance Ministry, Shurma said their institutional conflict is a normal practice in developed countries, yet they should work as a team under extreme conditions.

"Regretfully, this is what we are lacking. Hopefully, we will be able to reconcile the positions and agree on a reasonable level of monetary support, which will help solve budget problems and will not create an excessive devaluation pressure," he said.

As reported earlier, the National Bank of Ukraine has financed the national budget deficit since the beginning of the crisis through direct redemption of government bonds in the amount of UAH255 billion, including UAH105 billion in June and UAH30 billion in July. The government limited such transactions to UAH400 billion in 2022. According to National Bank Governor Kyrylo Shevchenko, any funding beyond these limits - UAH30 billion in each of the remaining months of this year and UAH200 billion next year - may plunge the country into a catastrophic spiral of inflation and devaluation of salaries, which Ukraine already had in the 1990. This would affect the least prosperous most and will lead to a collapse of the financial stability and the loss of control over economic processes, Shevchenko said.

Meanwhile, the Finance Ministry has stopped calling for raising the government bond rates to the market level, which, in the opinion of the National Bank, could provide an additional sum of UAH80 billion for funding the budget deficit before the end of this year.