Ukraine permits Treasury to deposit residuals in foreign currency

Ukraine’s Treasury will be allowed to place budget
receipts coming to its accounts on deposits in foreign currency, uaprom.info
news site writes in reference to the Cabinet resolution of Jan. 11. Previously,
only UAH-denominated deposits were allowed.

Evgeniya Akhtyrko: The possibility to accumulate more foreign currency on government
accounts might help to decrease the volume of currency purchased on Forex on
the eve of Ukraine’s substantial external debt repayments. Therefore, the
traditional spikes in the exchange rate observed around the periods of foreign
debt repayment might ease somewhat. However, the overall effect of this
introduction on ForEx is likely to be marginal. For example, the government’s
tradition to accumulate high treasury residuals and to boost fiscal spending in December results in more substantial and lasting surges on
the currency market.