NBU Cuts Reserve Requirements.

The National Bank (NBU) announced that as of Oct. 1 it would again reduce commercial banks’ obligatory reserve rates – the third cut this year. The minimum reserve rate for hryvnya current accounts will be reduced from 3% to 1%, and for hryvynya term deposits from 2% to 0.5%. On the other hand, reserve rates for foreign currency term deposits will increase from 3% to 4%. Alexander Viktorov: The improved economic performance and moderate inflation rate allows the NBU to free up more funds of commercial banks to support growth in lending. The NBU is also concerned about the increasing proportion of foreign currency loans in the economy (46.5% in 7M06 from 41.8% in 7M05) and so is seeking to tighten those.