Ukraine Treasury residuals increase 13% in May

Ukraine’s Treasury residuals increased 13.3% in May to UAH 18.4 bln as of June 1 from UAH 16.3 bln a month ago, according to a State Treasury report. That’s also compared to UAH 27.8 bln in accumulations as of June 1, 2015. The highest level of Ukraine’s Treasury accumulations was achieved at the start of December 2015 (UAH 48.0 bln, or 2.4% of GDP).

Alexander Paraschiy: This increase in Treasury accumulations could have come either from lower spending during the month or extra revenue from the central bank (so called “NBU profit,” which is the difference between NBU revenue from interests and costs incurred from conducting institutional activities). Apart from those two points, we do not see any source for higher residuals amid worsening budget collections (-4.2% yoy drop in general budget revenue in April). Recall, UAH 38 bln in NBU profit is budgeted for the year. Until April, the central budget did not receive any wires from the NBU though MinFin was expected to tap those funds already in 1Q16.