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Money supply in Ukraine falls by 2.7% in January 2018 – National Bank

Ukraine's net international reserves fell by 9.5% in January to reach $6,04 billion.
14:49, 14 February 2018

National Bank of Ukraine

Ukraine’s money supply in January 2018 dropped by 2.7%, to $435.63 billion, according to the preliminary data on credit statistics published on the National Bank of Ukraine’s official website, Interfax-Ukraine reports.

According to the central bank, such tendency occurs due to the shrinkage of cash in circulation outside of banks (which decreased by 3.3%, to $11.9 billion, as well as the shrinkage of deposit accounts (which dropped by 2.4%, to reach $20.3 billion).

Related: National Bank suspends placement of three-month deposit certificates

Banks’ credit portfolio in January gained 2.9% to reach $384.47 billion. At the same time, the volume of credits issued in hryvnia increased by 0.4% to reach $21.17 billion, whereas  that of credits issued in foreign currency climbed by 4.7% to $17.28 billion.

The National Bank points out that the boost in foreign currency deposits is caused by the change in calculation of such credits’ balance under the banks’ transit to MSFO9. In particular, by the correction of interest income from devaluation of financial assets related to operations carried out in 2017.

Related: National Bank expects state debt below 70% of GDP in 2018

According to the regulator’s data, despite the rise in interest rate, the cost of hryvnia financing for corporations dropped by 0.5 percentage points in January and reached 15.3% annually, whereas that of foreign currency financing fell by 0.5 percentage points and reached 6.1% annually.

The cost of hryvnia financing for households by the end of January decreased by 0.7 percentage points, to 29.7% annually, while that of foreign currency financing shrank by 0.5 percentage points, to 8.4% annually.

Related: National Bank raises refinancing rate to 16%

The banks’ deposit portfolio in hryvnia dropped by 2.9% in January and currently stands at $17.62 billion. Conversely, the banks’ deposit portfolio in foreign currency fell by 1.8% over the reported period and is now at $14 billion.

The returns on deposit products in hryvnia for corporations increased by 0.3 percentage points in January to reach 9.6% annually, whereas that on deposit products in foreign currency decreased by 0.1 percentage points, to 2.4% annually.

Related: National Bank places circa $1 billion of forex reserves under World Bank management

The interest rate for hryvnia deposits for households gained 0.2 percentage points by the end of December and reached 11.6% annually, whereas that for foreign currency deposits dropped by 0.1 percentage points.

Money supply shrank by 1.7% in January and stands at $14.5 billion. Net international reserves fell by 9.5% in January to reach $6,04 billion. Bank debt on refinancing credits dropped by 1.5%, to $2.5 billion.

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