Ukraine monetary base drops 0.6% in July

Ukraine’s monetary base dropped 0.6% m/m in July (down
0.5% YTD) from a 3.7% m/m increase in the prior month, the National Bank of
Ukraine (NBU) reported on August 9.  The money supply grew 1.0% m/m (up
1.1% YTD) compared to a 1.3% m/m decline in June. 

Alexander Paraschiy: A 1%
decrease, or USD 176 mln, in gross international reserves in July
pulled the monetary base down. Even accelerated public spending did not prevent
monetary base contraction as residuals on Treasury accounts fell 2.3%, or by
UAH 1.1 bln, to UAH 44.1 bln. 

While these developments differ from what we expected
for July, they don’t change our view on monetary base prospects in 2017.
Through the autumn months, we expect stronger public outlays boosting monetary
aggregates. We are keeping our monetary base forecast unchanged at 8.6% YTD
growth by the year end.