Ukraine monetary base shrinks 0.2% in May
11 June 2015
Ukraine’s monetary base shrunk 0.2% m/m in May (-1.1% YTD) compared to a 0.5% m/m decline in the prior month, the National Bank of Ukraine (NBU) reported on June 10. Money supply decreased 1.3% m/m (+1.1% YTD) in May compared to a 4.7% m/m decline in the prior month. In May, the NBU purchased UAH 8.3 bln in state bonds compared to UAH 7.0 bln in the previous month.
Alexander Paraschiy: Further accumulation of funds in government accounts is the main reason for continued monetary base contraction. State budget collections surged nearly 40%, according to provisional reports last month, which means that authorities are still collecting more than they’re spending. Indeed the State Treasury reported residuals on its unified account rose to UAH 27.8 bln in May from UAH 23.6 bln in the prior month.
Nevertheless, we will continue to consider such accumulation of public funds as temporary. Even Finance Minister Natalie Jaresko mentioned that major spending will occur in 2H15, such as housing subsidies after the start of the heating season. Against this backdrop, we are keeping our monetary base projection unchanged at +23.0% YTD for 2015.
