Ukraine monetary base declines 1.6% in January

Ukraine’s monetary base declined 1.6% m/m (UAH 6.9 bln)
to UAH 429 bln in January after a 0.8% m/m increase in the prior month, the
National Bank of Ukraine (NBU) stated in a provisional report on Feb. 13. Money
supply slid 1.4% m/m to UAH 1,260 bln.

Evgeniya Akhtyrko: January’s
monetary base drop is usual for Ukraine’s fiscal cycles
as tighter state spending followed the traditional massive budget injections in
December. In January, treasury residuals increased 21% m/m (from UAH 9.9 bln to
UAH 11.9 bln). 

In addition, significant repayments on the central
bank’s refinancing by commercial banks also contributed to the monetary base
contracting. The net repayments amounted to UAH 4.5 bln, while the total volume
of refinancing issued by the NBU declined 7.3% m/m (to UAH 57.1 bln).

We expect the monetary base to increase 5-6% YTD in
2019 (vs. 9.2% YTD growth in 2018).