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National Bank of Ukraine: interest rates for foreign currency deposits at record low

Source : 112 Ukraine

The regulator expects a considerable decrease in interest rates for loans in the next 12-18 months
18:43, 18 December 2017

dsnews.ua

The interest rates for foreign currency retail deposits are at the record low, while the deposits in hryvnia – at a five-year low, according to the statement of the National Bank of Ukraine.

Given the cheaper funding base, the NBU expects interest rates on loans to decrease significantly over the next 12-18 months.

At the same time, it is informed that the consumer lending doesn’t pose risks to the financial stability.

Related: Banking system of Ukraine set world record in size of troubled loans, - National Bank

“Lending to businesses and households has restarted after a three-year break. Lending first recovered in the retail segment, and banks are growing their retail loan portfolio primarily in consumer loans. Ukraine currently has the lowest retail loan penetration in Europe, and the NBU expects household credit to grow rapidly over the next few years,” it is said.

The NBU also notes that the retail lending doesn’t influence private consumption drastically, so there’s no need to restrain it.

“Retail lending does not currently have a material impact on private consumption and it does not pose a significant risk to inflation or the current account. Therefore, the NBU does not yet see a need to act to restrain retail lending”.

However, the bank promised to be vigilant of the developments in retail lending.

Related: Delay of IMF tranche threatens economic stability of Ukraine, - National Bank

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