The ongoing strengthening of the hryvnia is a consequence of the high value of the national currency due to a tight monetary and weighted fiscal policy, as well as growing earnings from exports, Deputy Governor of the National Bank of Ukraine (NBU) Oleh Churiy has said.
“There are several factors that are conducive to the stronger hryvnia: these are, first of all, a tight monetary policy, a balanced fiscal policy, and the third important factor is that this year Ukraine has gathered a harvest that was a record over the years of independence. All this means export earnings which have reinforced what is happening today,” he said at a briefing in Kyiv on Saturday.
As reported, the hryvnia forex rate has been strengthening since the end of October. After the introduction of martial law on November 26 until December 26, the national currency dropped sharply to UAH 28.315 per U.S. dollar. However, after a couple of days, the hryvnia resumed its positive momentum, which has accelerated sharply since December 17. The hryvnia forex rate on the interbank forex market on Friday strengthened to UAH 27.385 per U.S. dollar from UAH 27.515 at the end of the previous working day. Quotes of the hryvnia at the end of trading stood at UAH 27.37-27.40 per U.S. dollar.
The European Bank for Reconstruction and Development (EBRD) under the Ukraine Public Transport Framework project to improve public transport infrastructure signed four loan agreements worth EUR 38 million in total with trolleybus utilities of Mariupol, Kryvy Rih, Kharkiv, and Zhytomyr in January-November 2018 against municipal guarantees.
In particular, it signed a EUR 13 million agreement with municipally owned Mariupol Tram and Trolleybus Administration in July, while agreements worth at EUR 8 million each was signed in September with municipally owned Urban Trolleybus (Kryvy Rih) and municipally owned Trolleybus Depot No. 2 (Kharkiv). Late in November, the EBRD signed an agreement with municipally owned Zhytomyr Tram and Trolleybus Administration to the tune of EUR 9 million.
Under the project, the loans are additionally backed by EBRD loans from the Clean Technology Fund (CTF) and grants from the Eastern Europe Energy Efficiency and Environment Partnership (E5P).
According to the Antimonopoly Committee of Ukraine, in the case of Kryvy Rih, the city provided a guarantee for EUR 10 million, as the bank gives its municipal enterprise an additional EUR 2 million loan from the Clean Technology Fund. CTF loans for Mariupol and Kharkiv also accounted to EUR 2 million.
The loans are issued for 12 years with repayment in equal parts every six months after a two-year grace period.
Kryvy Rih’s interest rate on principal debt is set at 5.75% and is pegged to the rate of 6-month Euribor rate with the possibility of lowering. It depends on the city’s rating and the borrower’s compliance with the required financial ratios. At the same time, the rate for a CTF loan is only 0.75%.
The arrival of the first disbursement under a new Stand-By Arrangement with the International Monetary Fund (IMF) and related financing can increase the country’s international reserves to more than $20.4 billion by the end of this year, Deputy Governor of the National Bank of Ukraine (NBU) Oleh Churiy has said.
“Our reserves can grow to more than it was on January 31, 2013, and they will exceed $20.4 billion,” he said at a briefing in Kyiv on Saturday.
Churiy specified that this forecast was made taking into account the expected arrival of about $400 million in external financing, which the government will raise under guarantees provided by the World Bank.
The NBU official recalled that Ukraine had received $1.4 billion in the first SBA disbursement in the past week, and EUR 500 million in the first tranche of the EU’s Macro-Financial Assistance was provided earlier this month.
As reported, after the receipt of the first SBA disbursement, the National Bank on December 21 reported the growth of the international reserves to $20.1 billion, which was a five-year maximum: the previous time such a level of the international reserves was recorded in January 2014.
The National Bank of Ukraine in early November lowered the forecast of the country’s international reserves for the end of 2018 to $19.2 billion from $20.7 billion, for 2019 to $18.6 billion from $18.8 billion and for 2020 to $19.1 billion from $19. 7 billion.
The Antimonopoly Committee of Ukraine (AMCU) has allowed Dragon Capital Investments Limited, a member of the group of companies (GC) Dragon Capital, to acquire an office building belonging to Kyiv-based Fortuna Bank, which is undergoing the liquidation procedure.
“Dragon Capital Investments Limited was permitted indirectly, through LLC Investcapital (Kyiv), to acquire assets, i.e. Kyiv-based non-residential premises owned by JSC Fortuna Bank,” the AMCU said.
As reported, in November 2018, Dragon Capital CEO Tomas Fiala said at a meeting of the European Business Association (EBA) that his company had bought “one facility for UAH 170 million” from the Deposit Guarantee Fund. According to the ProZorro.Sale platform, it was a Fortuna Bank office building at 35 Borychiv Tik Street in Kyiv’s Podilsky district. The lot included a non-residential building with an area of almost 4,000 square meters and a 0.085 ha plot of land.
JSC Fortuna Bank was designated as insolvent in January 2017.
ANTI-TRUST, DRAGON CAPITAL'S, FORTUNA BANK'S, OFFICE BUILDING
Myronivsky Hliboproduct Agroholding (MHP) will borrow EUR120 million (UAH 3.79 billion) in a loan from ING Bank N.V., PrJSC Zernoproduct MHP reported.
The company will act as a guarantor for this loan, it said in an announcement of the information disclosure system of Ukraine’s National Securities and Stock Market Commission.
PrJSC Zernoproduct MHP’s assets are estimated at UAH 6.103 billion, according to the latest financial statements. The ratio of loan value to asset value is 62%.
According to the MHP website, PJSC Zernoproduct MHP was established in 2004, it has 19 branches, two grain elevators, 23 dairy farms. Its land bank is 90,900 hectares.
The volume of construction work carried out in Ukraine in November 2018 increased by 1% year-over-year, while this indicator in October 2018 compared to October 2017 increased by 4.8%. The report does not include data from the occupied territory of Crimea and the temporarily uncontrolled territories in Donetsk and Luhansk regions, the State Statistics Service of Ukraine said.
The volume of construction works in November 2018 compared to October 2018 grew by 0.4% (according to seasonally adjusted data, it decreased by 3.9%), whereas this indicator in October 2018 from September 2018 decreased by 5.2%.
In November 2018 compared to November 2017, the volume of work decreased in residential construction, and increased in non-residential and engineering. According to unadjusted data, the decline in residential construction was 9.3%. Non-residential construction saw a 1.2% increase. Construction of engineering structures grew by 4.8%.
In addition, according to the statistics service, the volume of construction works in the construction of residential buildings in November 2018 decreased by 11% compared to October 2018, non-residential buildings increased by 3.3%, engineering structures increased by 3.3%.
The fall in the volume of construction work in January-November 2018 compared with January-November 2017 was recorded in the city of Kyiv and 10 regions of Ukraine, in particular in Mykolaiv region (by 15.6%, to UAH 2.21 billion), Kirovohrad region (by 14.8%, to UAH 1.3 billion), Sumy region (by 12%, to UAH 1.09 billion) and Ternopil region (by 11.1%, to UAH 1.46 billion) regions.
