Ukraine monetary base drops by 0.3% in January

Ukraine’s monetary base decreased 0.3% m/m to UAH 335.1 bln in January, according to a provisional data from the National Bank of Ukraine (NBU) on Feb 11.  The money supply (M3) inched up by 0.1% m/m to UAH 995.3 bln.

Alexander Paraschiy: Fiscal statistics remain the key determinant of the monetary aggregates’ change, as we can conclude from the provisional statistics. In particular, the accumulation of residuals at the unified treasury account (up to UAH 16.7 bln as of Feb. 1 vs. UAH 9.0 bln as of Jan. 1) is the key reason for the reduced monetary base amid almost flat gross international reserves. This pattern is very likely to remain unchanged for the time being. The only difference we expect is that the budget surplus won’t continue as inflation will slow down. This means that over the upcoming months, monetary aggregates should resume gradual growth. By the end of the year, we anticipate the monetary base increasing by 15.1% YTD.