Ukraine monetary base drops 1.7% in January

Ukraine’s monetary base declined 1.7% m/m, or UAH 6.7
bln in January after soaring 5.4% m/m in December, the National Bank of Ukraine
(NBU) stated in its provisionary report released on Feb. 13. Money supply
decreased 2.7% m/m from 7.0% m/m growth in December.

Evgeniya Akhtyrko: The January
fall in monetary indicators was quite predicable after their abnormal surge in
the prior month owing to massive budget injections. The
restoration of treasury residuals in January
was responsible for the negative swing, and the central bank’s net currency
sale on the ForEx of USD 15.9 mln was not enough to smooth out the negative
effect.

The negative practice of accumulating budget
receipts at the end of the calendar year causes difficulties in projecting
changes in the monetary base. For 2018, we project a 6.1% YTD monetary base
increase (vs. 4.6% YTD in 2017).