NBU Cuts Reserve Requirements.

From August 1the National Bank (NBU) will reduce commercial banks’ obligatory reserve rate requirements for deposits by 1-3%. The following rates will be required: 2% for term deposits in hryvnya (from 4%), 3% for term deposits in foreign currency (from 4%), 3% for current deposits in hryvnya (from 6%) and 5% for current deposits in foreign currency. Alexander Viktorov: This is the second reserve requirement cut since May. The current “non-inflationary” rate of monetary expansion allows the NBU to spur economic growth by supporting growth of lending. However, there is a risk that rapid lending expansion could put many banks at risk of violating capital adequacy requirements. The average capital adequacy ratio of commercial banks has deteriorated to 14.54 as of May 31 from 14.95 at the start of the year.