Ukraine monetary base increases 1.3% m-o-m in May

Ukraine’s monetary base increased 1.3% m-o-m (+6.1% ytd) and its money supply (M3) grew 0.4% m-o-m (+6.2% ytd) in May, according to NBU data released on June 11. In May, NBU state bond purchases were very modest at UAH 1.1 bln (UAH 4.1 bln a month ago). The NBU increased its state bonds portfolio by UAH 21.3 bln during 5M13.

Alexander Paraschiy: The monetary base increased owing to a decline in foreign liabilities that resulted from a USD 968 mln debt payment to the IMF in May. NBU loans to the government remained intact since NBU state bond purchases were modest while sterilizing operations rose to UAH 10 bln through the month (vs. UAH 6.5 bln a month ago). The dynamic of monetary aggregates is in line with our previous estimate and we are leaving our monetary base forecast at 8.9% ytd for 2013.