Ukraine monetary base inches up 1% in November

Ukraine’s monetary base inched up by 0.9% m/m in November (-3.6% YTD) compared to a 0.9% m/m decline in the prior month, the National Bank of Ukraine (NBU) reported on Dec. 9. In November, money supply increased 1.0% m/m (+1.3% YTD). The NBU purchased UAH 5.5 bln in state bonds compared to UAH 2.0 bln purchased in previous months (UAH 74.6 bln for 11M15).

Alexander Paraschiy: It looks like the accumulated budget funds will not be spent in full in 2015. Residuals of public funds at the unified treasury account remain impressively high (UAH 48.0 bln, or 2.5% of GDP as of Dec. 1) and we can hardly anticipate the Finance Ministry and local budgets to disburse all the funds just in December amid the resumed hryvnia volatility at the ForEx. Given the huge budget accumulations, the government has secured stronger spending in December.  However, we do not expect the monetary base to increase more than 10% m/m on the back of those outlays.  So we are lowering our monetary base forecast to 6.1% YTD in 2015 compared to 15.3% YTD estimated previously.