Ukraine monetary base rises 9.2% in 2018

Ukraine’s monetary base grew 0.8% m/m (UAH 3.3 bln) to
UAH 435.8 bln in December after rising 1.8% m/m in November, the National Bank
of Ukraine (NBU) stated in a provisional report released on Jan. 12. The
monetary base increased 9.2% yoy in 2018. Money supply grew 3.9% m/m to UAH
1,276 bln, bringing 2018 growth to 5.6% yoy.

Evgeniya Akhtyrko: We found
two major factors that contributed to monetary base growth in December. Boosted
NBU foreign currency purchases during the month (net USD 339 mln) caused a
significant amount of hryvnia to be disbursed to the system. Secondly, the
government engaged in its traditional year-end fiscal spending spree. In
particular, treasury residuals dropped by UAH 7.3 bln to UAH 9.9 bln in
December.

We expect monetary base to increase 5-6% in 2019.