Ukraine’s National Bank (NBU) introduced long-term refinancing of banks for up to 5 years in addition to standard short-term refinancing instruments. The move is aimed at achieving several goals, both related to maintaining financial stability in the country and stimulating economic growth, the NBU press service reports.
First, the long-term refinancing mechanism will support bank lending in UAH, reinforcing the effect of other measures that were taken by the National Bank in recent months: reduction of the interest rate and introduction of incentive reserve rates.
Secondly, the new instrument will provide an additional guarantee of maintaining sufficient liquidity in the banking system. This is particularly important for the smooth running of client operations in the face of deteriorating moods of market participants that are caused by the spread of coronavirus.
As we reported earlier, on March 17, NBU informed about signs of the shortage of cash currency in the banks. According to the statement, the shortage was caused by the increase in the population's demand for cash currency.