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Research Team
  • Research Team

Weekly Insight -- Ukraine in default on VRIs

Ukraine missed the scheduled payment on VRIs and is no longer under time pressure to negotiate the restructuring terms.

Research Team
  • Research Team

Weekly Insight -- MoF extends offering of UAH bonds

The Ministry of Finance updated the schedule of its bond auctions last Friday and added a four-year bond to the list. This may deepen the fragmentation of the bond trading further.

Research Team
  • Research Team

Weekly Insight -- UAH bond trading becoming fragmented

Last week, demand for UAH bonds concentrated mostly in short-term bills with maturity of up to one year and also three-year notes.

Research Team
  • Research Team

Weekly Insight -- NBU reserves surge 10% in April

Gross international reserves of the NBU were up 10.1% in April and 6.6% YTD to US$46.7bn, an all-time high, on generous inflows of foreign financial aid. Specifically, Ukraine received a US$4.9bn loan from the EU within the ERA program and an US$1.3bn facility from the World Bank.

Research Team
  • Research Team

Weekly Insight -- C/A improves on budgetary grants in March

In March, Ukraine’s current deficit narrowed to US$0.9bn as the inflow of foreign budgetary grants resumed.

Research Team ... (+2)
  • Research Team
  • Taras Kotovych

Weekly Insight -- Hryvnia set new appreciation records

Last week, the hryvnia appreciated to UAH25.68/US$, a new record for 2019 and 2018. This week, we should continue to see appreciation due to FX inflows from foreign investors in local-currency debt, and a low level of NBU participation in the market.

Research Team ... (+2)
  • Research Team
  • Taras Kotovych

Bond Market Insight -- Hryvnia borrowings increase

In July's first auction, demand for local-currency bills exceeded UAH10bn, and the amount of borrowings exceeded UAH8bn. These amounts were greater than at any auction during the previous two months. Yesterday's demand was spread across all instruments, while interest rates in the bids allowed a decrease in the cost of borrowings.

Research Team ... (+2)
  • Research Team
  • Taras Kotovych

Bond Market Insight -- Demand influences rates

Yesterday, as expected, demand was concentrated in the six-year notes, allowing the MoF to finance the budget with about UAH7.5bn, including UAH6.7bn from local-currency instruments. Most likely, much of this demand was from foreign investors.

Research Team ... (+2)
  • Research Team
  • Taras Kotovych

Weekly Insight -- Real GDP rises 2.5% YoY in 1Q19

The State Statistics Service of Ukraine revised upward its estimate of real GDP growth to 2.5% YoY, up from its previous estimate of 2.2% YoY growth. In SA QoQ terms, the economy grew 0.3%.

Research Team ... (+2)
  • Research Team
  • Taras Kotovych

Bond Market Insight -- More borrowings in FX

Borrowing in the domestic bonds market still relies on demand from foreign investors, which, in turn, depends on which instruments are offered. This week, demand once again favoured FX-denominated bills, which allowed the MoF to refinance part of today's debt repayments.

Vitaliy Vavryshchuk
  • Vitaliy Vavryshchuk

Macro Review-Macro risks edge up on large fiscal needs

Macroeconomic risks have increased in the past months, but even so, they remain fully manageable. The recent resumption of inflow of foreign financial aid provides a comfortable safety cushion for the FX market and a vital liquidity source for the state budget. Expected disruptions in electricity supplies in late autumn and winter is currently the second most significant risk for the economy, while the shaky safety situation remains the top risk. The economy was off to a great start in 2024, ...

Vitaliy Vavryshchuk
  • Vitaliy Vavryshchuk

Macro Update -- Macro Risks Remain Manageable

The resilience of Ukraine’s economy to unprecedented external shocks remains beyond any doubt. The economy continues to grow in 2024 at a reasonable pace and massive destruction of the country’s energy infrastructure will only slow, but not disrupt, the recovery. Ukraine’s largest economic achievement of the past quarters is the launch of a fully functioning Black Sea cargo corridor that made it possible to export a wide range of commodities. The biggest positive surprise of 1Q24 was a sharp slo...

Research Team
  • Research Team

Weekly Insight -- Consumer inflation accelerates

Mainly due to the sharp rise in prices for food and housing services, inflation rose to 6.1% in January, exceeding the upper limit of the NBU's target range. Looking ahead, the impact of pro-inflationary factors will be partially offset by the strengthening of the exchange rate, keeping inflation not far from current levels. As before, we expect that at the next meeting on monetary issues on 4 March, the NBU Board will keep the rate on hold at 6%.

Research Team
  • Research Team

Bond Market Insight -- Active domestic borrowing

After February's second primary auction, the MoF almost fully refinanced principal repayments in local currency scheduled for this month. In total, borrowings in hryvnia can once more double what's needed for redemptions, as was seen in January.

Research Team
  • Research Team

Weekly Insight -- Construction keeps growing

After falling during 1H20 against the background of the coronacrisis, construction has been steadily increasing since August, mainly due to public financed road infrastructure projects. In 2021, we expect the role of construction as a growth driver to move to the private sector.

Mykhailo Demkiv
  • Mykhailo Demkiv

Banking Sector Insight: About to take off

​The Ukrainian banking system is bouncing back from the bottom of the financial crisis which was reached in 1H15. Increased solvency and the abundant level of liquidity at most banks paves the way for a credit revival.  Financial stabilisation is now on firmer ground. The Ukrainian banking system is showing strong signs of recovering: total deposits rose by 2.2%, net of FX effect, during the period January-May 2016 while UAH liquidity remains abundant with an excess of approximately UAH70bn. ...

Research Team
  • Research Team

Weekly Insight -- Ukraine in default on VRIs

Ukraine missed the scheduled payment on VRIs and is no longer under time pressure to negotiate the restructuring terms.

Research Team
  • Research Team

Weekly Insight -- MoF extends offering of UAH bonds

The Ministry of Finance updated the schedule of its bond auctions last Friday and added a four-year bond to the list. This may deepen the fragmentation of the bond trading further.

Research Team
  • Research Team

Weekly Insight -- UAH bond trading becoming fragmented

Last week, demand for UAH bonds concentrated mostly in short-term bills with maturity of up to one year and also three-year notes.

Research Team
  • Research Team

Weekly Insight -- NBU reserves surge 10% in April

Gross international reserves of the NBU were up 10.1% in April and 6.6% YTD to US$46.7bn, an all-time high, on generous inflows of foreign financial aid. Specifically, Ukraine received a US$4.9bn loan from the EU within the ERA program and an US$1.3bn facility from the World Bank.

Research Team
  • Research Team

Weekly Insight -- C/A improves on budgetary grants in March

In March, Ukraine’s current deficit narrowed to US$0.9bn as the inflow of foreign budgetary grants resumed.

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