Net sale of dollars by the National Bank of Ukraine (NBU) increased this week to $533.4m from $507.8m a week earlier, according to the regulator’s data.
According to them, the central bank sold $533.6m on the interbank market and bought back $0.15m.
The official hryvnia exchange rate weakened by 37 kopecks during the week, in particular, on Friday the national currency exchange rate fell by 17 kopecks to UAH 39.7206/$$. – to 39.7206 UAH/$1.
In the cash market, the dollar also rose in price during the week: by about 12 cents to UAH 39.95/$1. – up to UAH 39.95/$1, including on Friday – by 6 kopecks.
As evidenced by the data, which the NBU managed to publish for this period, from Monday to Wednesday, the negative balance between the volume of currency purchases and sales by the population increased from $30.2 million to $56.9 million.
Last Friday, May 3, the National Bank announced the largest package of easing of currency restrictions for businesses since the beginning of the full-scale war, which provides for the abolition of all currency restrictions on imports of works and services, provides the ability of businesses to repatriate “new” dividends, provides an opportunity to transfer funds abroad on leasing and rent.
In addition, the new steps of currency liberalization provide for the easing of restrictions in terms of repayment of new foreign loans and interest on “old” foreign loans, as well as easing restrictions for the transfer of foreign currency from representative offices in favor of their parent companies.
As reported, the NBU increased its net foreign exchange interventions on the interbank market in April by 27.7% to $2.283bn, compared to $1.370bn in the same period last year.
On April 24, Ukraine received the second tranche of transitional financing in the amount of EUR1.5 billion (UAH 63.32 billion in hryvnia equivalent) under the European Union’s Ukraine Facility instrument, and the country also received UAH 2.7 billion in grants from international partners last month.
Ukraine’s international reserves in April decreased by 3.1%, or $1.4 billion – to $42 billion 399.5 million. On April 25, the NBU raised their forecast for the end of this year to $43.4 billion from $40.4 billion and to $44.3 billion from $42.1 billion – at the end of next year.
The National Bank of Ukraine (NBU) has fined Bank 3/4 (Kyiv) UAH 10m for improper financial monitoring of client operations within the framework of the implementation of anti-money laundering legislation, the regulator said on its website.
According to the release, Universal Bank (mono) received a written warning for violation of the established deadline for providing information at the request of the authorized body.
Also, the National Bank fined FC Phoenix and FC Activitis for UAH 6.33 million and UAH 595 thousand, respectively.
Bank ¾ was registered in 2008. According to NBU information, as of March 1, 2024, it ranked 48th (UAH 1.55 billion) in total assets among 63 operating banks. Net profit for last year amounted to UAH 3.03 mln grnatsbank
The National Bank of Ukraine (NBU) has fined PJSC IC Arsenal Insurance (Kiev) for 255 thousand UAH for violation of requirements in the sphere of financial monitoring. As reported on the regulator’s website, the measure was applied for violation of the requirements of the law “On prevention and counteraction to legalization (laundering) of proceeds of crime, financing of terrorism and financing of proliferation of weapons of mass destruction” (VAT/FT). In particular, the company was fined for improper fulfillment of the obligation to develop and implement internal documents, as well as for insufficient customer due diligence, including failure to verify clients in accordance with the procedure established by law.
In addition, the fine has been imposed for non-implementation of additional measures in the proper verification of the client, the ultimate beneficial owner of which is a politically exposed person, and insufficient application of risk-oriented approach, including improper fulfillment of the obligation to carry out an assessment of risks inherent in its activities.
IC “Arsenal Insurance” is the legal successor of IC “Arsenal-Dnepr”, operating in Ukraine since 2005. It is represented in all regional centers and some large cities of the country.
The National Bank of Ukraine has estimated Ukraine’s real gross domestic product (GDP) growth in the first quarter of 2024 by the same period last year at 3.1%, while in January it forecast it at 7.1%.
“Real GDP growth in the first quarter of 2024, according to NBU estimates, was weaker than expected, primarily due to restrained budget expenditures amid uncertainty about the receipt of external financing. An additional factor was the blockade of the western border, which restrained the activity of certain types of activities,” the National Bank explained in the Inflation Report published on its website.
At the same time, as the NBU pointed out, stable operation of the sea corridor, favorable weather and increased domestic demand supported economic growth. The central bank added that fiscal policy remained accommodative and, together with the effect of a significant increase in fiscal spending at the end of 2023, significantly fueled aggregate demand.
Earlier, in late April, the Economy Ministry estimated Ukraine’s GDP growth at 4.5% in the first quarter of this year.
As the National Bank notes, moderate GDP growth rates will remain until the end of 2024. “The main factors of growth will remain the preservation of soft fiscal policy, revitalization of external demand, as well as further adjustment of business and population to the conditions of significant security threats. However, the pace of economic growth will slow given the impact of the war and the depletion of growth momentum from the low base of 2022,” the NBI pointed out.
It added that the recovery will also be constrained by the impact of the destruction of energy infrastructure.
According to the updated forecasts, GDP growth will accelerate to 3.7% in the second quarter (the NBU expected it at 4.8% in January) before slowing to 1.3% (1.7%) in the third quarter and accelerating again to 4.1% (2.0%) in the fourth quarter.
Overall, for 2024, the NBU worsened its growth forecast for the Ukrainian economy to 3% from 3.6% in its January report, and for 2025 to 5.3% from 5.8%.
“The negative contribution of revised estimates of the e/e deficit to the change in real GDP in 2024 is estimated at 0.6 percentage points (pp), and 0.5 pp in 2025. Instead, the impact on GDP of a smaller grain harvest in 2024 will be insignificant due to the reorientation of agricultural producers to more marginal crops, particularly oilseeds,” the central bank said.
According to the regulator, the balance of risks of the baseline forecast is shifted towards deterioration of Ukraine’s economic growth rates and increased price pressure.
The National Bank in the updated Inflation Report increased the number of key risks of the forecast (with a strong impact and probability of 25-50%) to three: to the risk of a longer period and intensity of the war added the risk of large budgetary needs (a quarter earlier the NBU estimated its probability at 15-25%) and large damage to energy and port infrastructure (a quarter earlier the impact of this risk the central bank considered moderate).
At the same time, the probability of the risk of reduction of volumes and loss of rhythm of international aid receipts and continuation of partial blocking of cargo traffic across the border by some EU countries was reduced from 25-50% to 15-25%, but the degree of impact of the latter risk was increased from weak to moderate.
In addition, the NBU added a new risk – aggravation of the situation in the Red Sea, but estimated its probability at 15-25% and the degree of influence as low, as well as excluded the risk of increasing the capacity of maritime export routes, which is positive for the forecast.
Earlier Experts Club analytical center and Maxim Urakin released a video analysis of how the GDP of the world’s countries has changed in recent years, more detailed video analysis is available here – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3 Subscribe to Experts Club YouTube channel here – https://www.youtube.com/@ExpertsClub.
EXPERTS CLUB, GDP, MACROECONOMICS, NATIONAL BANK, UKRAINE, URAKIN
The National Bank of Ukraine has raised its forecast of international reserves to $43.4 billion at the end of this year from $40.4 billion and to $44.3 billion at the end of next year from $42.1 billion.
“Compared to the previous forecast, the risk of insufficient international financing this year has significantly weakened, but the risks of rhythmicity of its receipt remain,” the NBU said in a press release on Thursday.
The central bank reminded that in March, about $9 billion was received from international partners, which allowed to increase international reserves to almost $44 billion.
In addition, in recent days, Ukraine has received positive news from the United States about the approval of a military and financial assistance package, and another tranche of EUR 1.5 billion has been received from the EU.
“In view of this, Ukraine can count on $38 billion of external budgetary assistance this year,” the NBU said.
According to its updated forecast, the estimate of the current account deficit this year has been downgraded from $16.9 billion to $20.2 billion, but next year it has been improved from $19.8 billion to $18.2 billion.
For more details on macroeconomic indicators of Ukraine and the world, GDP of major countries and other economic topics, please see one of the video analyzes of the Experts club think tank – https://youtu.be/w5fF_GYyrIc?si=Ymo-FlMFNGfLLdK-
You can subscribe to the Experts club channel here: https://www.youtube.com/@ExpertsClub
EXPERTS CLUB, GDP, international reserve, MACROECONOMICS, NATIONAL BANK
The National Bank of Ukraine (NBU) after weakening the official hryvnia exchange rate on Thursday by 14 kopecks on Friday lowered it by another 23 kopecks. – to 39.3990 UAH/$1, which is a new historic low.
As one of the market participants told Interfax-Ukraine news agency, by the end of trading, quotations in the Bloomberg system reached 39.45 UAH/$1 to 39.465 UAH/$1, while the volume of transactions rose to almost $160 million from $123 million the day before.
The reference value of the national currency exchange rate, set by the NBU at 12:00, weakened by 25 kopecks on Friday. – to UAH 39.3489/$1.
In the cash market, the national currency exchange rate on Friday fell by only 4 kopecks. – to UAH 39.49/$1, although during the day it reached UAH 39.55/$1.
Despite the weakening of the official hryvnia exchange rate to a new historic low, the net sale of dollars by the National Bank fell this week to $377.1 million from $454 million a week ago and $652.7-680.4 million in the previous two weeks.
The NBU website indicates that the sale of foreign currency by the regulator decreased to $378.3 million from $483.6 million a week earlier, while the purchase – to $1.3 million from $29.6 million.
As reported, the NBU’s net sales rose to $1.79bn in March from $1.51bn in February, but given the jump in external revenues to a record level of almost $9bn, international reserves increased by 18% or $6.7bn in March to a record level of $43.76bn.
In January, the NBU lowered the forecast of Ukraine’s international reserves at the end of 2024 to $40.4 billion from $44.7 billion and to $42.1 billion from $45 billion at the end of 2025.
