National bank of Ukraine’s official rates as of 14/09/20
Source: National Bank of Ukraine
Official rates of banking metals from national bank as of September 14
One troy ounce=31.10 grams
The Board of the National Bank of Ukraine (NBU) decided to keep the key policy rate unchanged at 6%, the central bank said on its website on Thursday.
“The NBU Board has decided to keep its key policy rate at 6% per annum. Maintaining a loose monetary policy will support economic recovery amid moderate inflation and elevated uncertainty over how the pandemic is going to spread in Ukraine and the world,” the central bank said.
The NBU said that in July–August, inflation was below the target range of 5% ± 1 pp. The dynamics of core inflation were subdued.
The revival in consumer demand and the rise in fuel and natural gas prices in line with global market trends were offset by seasonal adjustments in raw food prices, the regulator said.
The central bank said that future movements in inflation will depend on how fast the economy recovers. Data on imports, the retail trade, and household expenditures on domestic tourism, real estate, and cars indicate a further recovery in consumer demand, which is likely to continue in the coming months.
“The NBU’s monetary policy easing cycle and the government’s fiscal stimulus, including changes in social standards, will support this trend,” the central bank said.
At the same time, energy prices will continue to increase as the global economy gradually recovers from the coronavirus crisis. The statistical effect of the low comparison base formed in the final months of last year will make a significant contribution to the overall rate of inflation. All of this paves the way for inflation to enter the target range by the end of the year.
According to the press release, the primary assumption behind the NBU Board’s decisions remains that Ukraine will continue to cooperate with the International Monetary Fund (IMF).
“This cooperation is important not only in terms of financing the state budget deficit, but also from the perspective of receiving support from other international partners and investors. Funds from these sources will go to finance anti-coronavirus measures and infrastructure projects, which will help jump-start the still weak investment activity,” the NBU said.
As before, a longer-lasting coronavirus pandemic, the further spread of the disease and stricter quarantine measures remain the key risks to macrofinancial stability, according to the press release.
“The increase in the number of coronavirus cases in Ukraine seen in recent months has not affected the pace of economic recovery. Nevertheless, a new wave of COVID-19 could restrain consumer demand and slow the recovery in domestic-market-oriented sectors, especially the services sector,” the regulator said.
According to the report, other risks also remain significant. They include: the negative impact of certain court rulings on macrofinancial stability; an escalation of the military conflict in eastern Ukraine or on the country’s borders; and the higher volatility of global food prices, driven by global climate change and the risk of stronger protectionist measures.
“Given the above balance of risks and the steady trend towards a recovery in consumer demand, the NBU Board kept the key policy rate unchanged, at 6%,” the central bank said.
The regulator said that the fact that the key policy rate is being kept below its neutral level shows that monetary policy is expansionary. The policy also leaves enough room for further interest rate cuts in the economy.
Previous key policy rate cuts are continuing to be transmitted to market rates. More specifically, interest rates on hryvnia domestic government debt securities and hryvnia deposits are at record lows. Loan rates are also continuing to fall.
According to the report, under current circumstances, the key policy rate of 6% is aimed at keeping the balance between maintaining moderate inflation and stimulating the economy. However, if the adverse impact of the coronavirus pandemic on domestic demand and business activity increases, the NBU will be ready to give the economy additional impetus for growth.
Conversely, the NBU could also deploy monetary policy tools to respond to the likely increase in inflation risks in 2021.
The loan portfolio of banks in July-August 2020 increased by 3%, while in the first half of the year it decreased by 5%, Governor of the National Bank of Ukraine (NBU) Kyrylo Shevchenko has said.
“In July and August, the banks really lent to the population much more actively than in the first half of the year. Indeed, in the first half of the year we saw a reduction in the loan portfolio by 5%. In the two months, the portfolio grew by about 3%,” he said during a press briefing by the National Bank.
According to him, over the past three months, the banks have lowered lending rates, in particular, rates on loans for businesses are below 10%, while in the first half of the year the average rate on such loans was 11%.
“Regarding the rates for the population, unfortunately, there is no such a trend, with the exception of rates on mortgage loans. Rates on mortgage loans are average, if we started the year at a level of almost 20%, then in July they were about 13% and in August we expect average rates on mortgage loans to be even lower,” Shevchenko added.
In addition, he noted a decrease in the volume of non-performing loans (NPL), in particular, over the past two months, their share decreased by 1.5%, excluding the revised statistics for August.
Kernel-Trade in August 2020 regained leadership in the list of the largest recipients of budgetary value added tax (VAT) refunds with UAH 1.26 billion, while in April, May and June the company topped the list, and in July it was not included in the list.
According to the State Treasury, Zaporizhstal affiliated with Metinvest Group followed Kernel-Trade with UAH 428 million in August compared to UAH 482 million in July, and Mariupol-based Illich Iron and Steel Works with UAH 385 million (UAH 515 million in July).
The top five companies from the list include also ArcelorMittal Kryvyi Rih, which in August received UAH 355 million of VAT refunds (in July it topped the list with UAH 573.7 million) and Dniprovsky Steel Plant with UAH 296 million (UAH 312 million).
The second five largest recipients of budgetary VAT refunds include Glencore Agriculture Ukraine with UAH 253 million (UAH 150 million) and Azovstal with UAH 189 million (UAH 482.8 million).
The top ten recipients also included Nibulon with UAH 182 million, Vilna Ukraina with UAH 180 million (there were no data on reimbursement from both companies in July), as well as Interpipe Nyzhniodniprovsky Pipe Rolling Plant with UAH 161 million (UAH 57 million).
In general, budgetary VAT refunds in August 2020 fell to UAH 8.57 billion compared to UAH 9.13 billion in July this year.
The State Agency for Roads of Ukraine (Ukravtodor), within the framework of the National Program for the Renewal of Bridges, announces the completion of restoration work at 11 out of 103 objects planned for 2020.
Agreements on repairs on 60 bridges have also been drawn up to date: 39 of them are already in operation, and repairs of 21 bridges will begin in the near future, Ukravtodor reported on its Facebook page on Wednesday.
Another 30 bridges are in the procurement phase, and two are awaiting tender announcements.
Earlier, Ukravtodor reported that as of September 1, contractors completed work on the arrangement of the upper layer of 1,700 km of roads. Today, in general, work is being carried out on 4,000 km of roads of national importance.
