Ukraine monetary base increases 0.6% in September

Ukraine’s monetary base increased 0.6% m/m (UAH 2.5
bln) to UAH 424 bln in September after rising 0.3% m/m in August, the National
Bank of Ukraine (NBU) stated in a provisional report released on Oct. 10. The
monetary base has increased 6.3% YTD. Money supply grew 1.2 m/m (3.3% YTD) to
UAH 1,249 bln.

Evgeniya Akhtyrko: Several
factors contributed to monetary base growth in September. Firstly, the NBU
continued refinancing banks, disbursing UAH 1.6 bln for this purpose during the
month. Secondly, treasury residuals dropped by UAH 5.7 bln to UAH 21.4 bln,
pointing to more generous public spending. Finally, the NBU’s net purchase of
foreign currency of USD 18.8 mln added more hryvnia to the system.

As of September, the YTD increase of the monetary
base exceeded our 2018 forecast of 6.1% YTD. However, the significant
month-to-month swings in monetary base are not unusual for Ukraine, and the
trend might change during the rest of the year.