11 July 2014
Ukraine’s monetary base accelerated 2.4% m/m in June (14.3% from the year start) from 1.2% m/m in the prior month, the National Bank of Ukraine (NBU) reported on July 11. At the same time, June money supply contracted by 0.8% m/m (+4.1% from the year start) after 0.1% m/m in May.
Alexander Paraschiy: The monetary base’s acceleration in June is disappointing, especially after we learned that the NBU didn’t stop advancing its profit to the budget in May. At first glance, we didn’t see much fiscal support from the NBU, which purchased UAH 1.2 bln bonds in June vs. UAH 12.5 bln in May. Yet it’s very unlikely that something other than hryvnia printing to prop up the budget was the reason for the acceleration. Against this backdrop, we see very slim chances for the NBU to meet its 2014 monetary base growth target of less than 21% YTD.