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Taras Kotovych
- Taras Kotovych
Research Team
- Research Team
Weekly Insight -- Inflation falls sharply in March
Ukraine’s annual inflation slowed further to 3.2% in March from 4.3% in February, which came as a major surprise.A significant deceleration in consumer prices was largely due to a decline in food prices, which is highly unusual for this time of the year. Prices for food staples declined by 0.2% MoM implying an only marginal growth of 0.2% in YoY terms. A number of significant food basket components were significantly cheaper in YoY terms, namely eggs (-34.3% YoY), sunflower oil (-17.4%), sugar (...
Taras Kotovych
- Taras Kotovych
Bond Market Insight -- UAH bond rates decline further
The Ministry of Finance decreased interest rates for two out of three offered UAH bonds yesterday, coming closer to a decrease in three-month NBU CDs interest rates. Yesterday's auction provided the state budget with UAH7.2bn proceeds, including UAH5.4bn in local currency and EUR42.9m. UAH proceeds were lower due to a smaller cap for 12-month bills and lower demand for three-year notes. However, this did not prevent the Ministry from continuing to lower rates for some instruments. Four weeks af...
Taras Kotovych
- Taras Kotovych
Weekly Insight -- NBU reserves boosted by foreign aid
The NBU gross international reserves spiked 18% in March and 8% YTD to US$43.8bn as foreign partners provided a record volume of new loans to Ukraine.The largest credit facilities provided to Ukraine in March included a EUR4.5bn tranche from the EU, US$1.6bn loan from Japan, US$1.5bn from Canada, and US$0.9bn from the IMF. Meanwhile, the NBU spent US$1.8bn in FX interventions to keep the hryvnia exchange rate under control. Also, Ukraine repaid US$1.0bn in external loans over the month, mostly t...
Taras Kotovych
- Taras Kotovych
Bond Market Insight -- Investors concentrate on short-term bonds
The MoF borrowed almost UAH6.8bn (US$173m) yesterday with a decline in interest rates. The greatest demand was for 12-month bills, which was almost twice oversubscribed. The range of interest rates in bids narrowed to 19bp: the lowest rate was 16.15% (up 3bp), and the highest rate declined by 11bp to 16.34%. Due to the cap, the MoF accepted bids with rates up to 16.25%, which was set as a cut-off rate or 10bp lower than last week. The weighted-average rate slid by 1bp to 16.23%.
Research Team ... (+2)
- Research Team
- Taras Kotovych
Weekly Insight -- Hryvnia set new appreciation records
Last week, the hryvnia appreciated to UAH25.68/US$, 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
Research Team ... (+2)
- Research Team
- Taras Kotovych
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.
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
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.
Research Team
- Research Team
Research Team
- Research Team
Weekly Insight -- Balance of payments runs a sizable surplus
In December, the C/A remained in surplus, although non-energy imports have already increased significantly. Besides, for the first time in six months, capital inflows under F/A were recorded thanks to government borrowings. At the beginning of the year, favorable terms of trade and the seasonal factor will determine the maintenance of the C/A surplus, while capital flows will be weak.
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. ...
Taras Kotovych
- Taras Kotovych
Research Team
- Research Team
Weekly Insight -- Inflation falls sharply in March
Ukraine’s annual inflation slowed further to 3.2% in March from 4.3% in February, which came as a major surprise.A significant deceleration in consumer prices was largely due to a decline in food prices, which is highly unusual for this time of the year. Prices for food staples declined by 0.2% MoM implying an only marginal growth of 0.2% in YoY terms. A number of significant food basket components were significantly cheaper in YoY terms, namely eggs (-34.3% YoY), sunflower oil (-17.4%), sugar (...
Taras Kotovych
- Taras Kotovych
Bond Market Insight -- UAH bond rates decline further
The Ministry of Finance decreased interest rates for two out of three offered UAH bonds yesterday, coming closer to a decrease in three-month NBU CDs interest rates. Yesterday's auction provided the state budget with UAH7.2bn proceeds, including UAH5.4bn in local currency and EUR42.9m. UAH proceeds were lower due to a smaller cap for 12-month bills and lower demand for three-year notes. However, this did not prevent the Ministry from continuing to lower rates for some instruments. Four weeks af...
Taras Kotovych
- Taras Kotovych
Weekly Insight -- NBU reserves boosted by foreign aid
The NBU gross international reserves spiked 18% in March and 8% YTD to US$43.8bn as foreign partners provided a record volume of new loans to Ukraine.The largest credit facilities provided to Ukraine in March included a EUR4.5bn tranche from the EU, US$1.6bn loan from Japan, US$1.5bn from Canada, and US$0.9bn from the IMF. Meanwhile, the NBU spent US$1.8bn in FX interventions to keep the hryvnia exchange rate under control. Also, Ukraine repaid US$1.0bn in external loans over the month, mostly t...
Taras Kotovych
- Taras Kotovych
Bond Market Insight -- Investors concentrate on short-term bonds
The MoF borrowed almost UAH6.8bn (US$173m) yesterday with a decline in interest rates. The greatest demand was for 12-month bills, which was almost twice oversubscribed. The range of interest rates in bids narrowed to 19bp: the lowest rate was 16.15% (up 3bp), and the highest rate declined by 11bp to 16.34%. Due to the cap, the MoF accepted bids with rates up to 16.25%, which was set as a cut-off rate or 10bp lower than last week. The weighted-average rate slid by 1bp to 16.23%.