Ukraine monetary base increases 0.5% in May
10 June 2016
Ukraine’s monetary base increased 0.5% m/m (0.4% YTD) in May after 2.6% m/m growth in the prior month, according to a National Bank of Ukraine (NBU) report released on June 9. Money supply (M3) increased 0.5% m/m in May (+2.7% YTD) after +0.9% m/m in the prior month.
Alexander Paraschiy: Rising gross international reserves (by USD 296 mln to USD 13.5 bln) has played a dominant role in the recent rise in the monetary base. Net foreign assets increased 8.3% m/m, contributing the most to monetary base dynamics, according to the provisional NBU report. At the same time, further accumulation of cash at the Treasury accounts (rising 13.3% in May to UAH 18.4 bln) has restricted monetary aggregate growth since a portion of the accumulated budget funds has not returned to the economy. Net domestic assets fell 4.2% m/m, a trend that is in line with our expectations. So we are keeping our initial forecast unchanged with a monetary base increase at 7.6% YTD in 2016, anticipating stronger budget spending in 2H16 will take the lead in boosting the monetary base.
