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.
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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.
The National Bank of Ukraine has revoked the licenses of Ardian Leasing Company LLC and FC Aktiv+ LLC on the basis of submitted applications, the regulator’s website has reported.
In addition, these companies are excluded from the State Register of Financial Institutions due to the revocation of licenses.
Another two non-banking financial institutions (NFIs) on the basis of their own applications, the regulator has agreed to change the scope of licenses for the activities of financial companies: LLC FC “Percent” – to exclude from the license such services as financial leasing and provision of guarantees, LLC “Siroko Finance” – to exclude the service of financial leasing from the license.
At the same time, the NBU notes that after the change in the scope of licenses for the activities of the financial company LLC “FC “Percent”, LLC “Siroko Finance” have the right to provide funds and bank metals on credit, as well as factoring service.
The corresponding decisions of the NBU Committee on supervision and regulation of non-banking financial services markets adopted at a meeting on April 5, 2024.
Providing microcredits “Ukr Credit Finance” (TM “CreditKasa”) and “1 Safe Agency of necessary loans” (TM “MyCredit”) received the highest revenue among financial companies in 2023 – respectively UAH 3.12 billion and UAH 2.33 billion, the National Bank reported on its website.
The next three companies were formed by FC “E Groshi Kom”, “Miloan” and “Aventus Ukraine” (TM CreditPlus), whose revenue amounted from UAH 1.66 billion to UAH 1.46 billion.
According to the results of 2022, the leaders in terms of revenue were Finod LLC, engaged in currency exchange and deprived of all licenses by the National Bank in August 2023, and Novapey payment system, the data of which the National Bank stopped publishing after re-licensing of payment systems. The net income of these companies in 2022 amounted to respectively UAH 5.41 and 5.18 billion, while the places from third to fifth were taken by “Ukr Credit Finance”, “Aventus Ukraine” and “E Groshi com” with revenue from UAH 2.50 billion to UAH 1.27 billion.
According to the results of 2023, net income over UAH 1 billion was received by five more companies, of which only one is not from the microcredit market: the network of payment terminals FC “Kontraktovy Dom” (TM “Easypay”), which received UAH 1.38 billion.
Following with relatively close revenue figures – from UAH 1.33 billion to UAH 1.07 billion are Lineura Ukraine (TM “Credit7”), LLC “Maniveo Fast Financial Assistance” (Moneyveo), “Consumer Center” (TM “ShvidkoGroshi”) and “Advance Credit”, which demonstrated the highest growth dynamics by the previous year among the entire top ten – almost 37 times.
Among the leaders, the highest labor costs were incurred by “Consumer Center” – UAH 167.8 million, or 13.6% of revenue, while at “Avans Kredit” they amounted to UAH 29.3 million, or 1.8% of revenue.
According to the NBU data, in 2023 the profitability of companies improved dramatically: of the 40 largest representatives of the market, all, except for the State Mortgage Institution (SMI), ended the year with net profit, which totaled UAH 1.57 billion, while a year earlier there were 15 unprofitable companies.
The leader in net profit among financial companies for the past year was PJSC “Ukrfinzhytlo” – UAH 5.94 billion. It is followed by Ukr Credit Finance – UAH 202.7 million, the State Fund for Entrepreneurship Development, the operator of state support programs – UAH 177.7 million and Bizpozyka – UAH 177.1 million.
Slightly behind was Maniveo Fast Financial Aid, which earned UAH 167.7 mln, which allowed it to partially offset UAH 625.6 mln of the previous year’s net loss.
“Ukrfinzhytlo” also significantly outperformed all and in terms of assets – 60.89 billion UAH, owing the primacy in these two categories to its capitalization at the expense of government bonds.
Avior FC specializing in lending to agrarians is next – UAH 12.05 billion, whose revenue amounted to UAH 125.4 million last year.
The other eight companies in the top ten with assets from UAH 8.68 billion to UAH 3.55 billion had no revenue last year, while salary expenses and net profit were minimal.
The National Bank of Ukraine (NBU) has imposed penalties on TAScombank, as well as financial companies “Ap. Mi. Finance” and “Hertz” for a total amount of UAH 272 thousand, stated on the website of the regulator.
“TASkombank” was fined for UAH 170 thousand for providing the NBU with statistical reporting data in violation of the procedure for their formation, which led to repeated provision within six months of reporting data with insignificant errors.
Meanwhile, Ap. Mi. Finance” and “Hertz” were fined UAH 51 thousand each for late submission of reports: for December 2023 and January of the current year, respectively.
These decisions were made on the basis of the results of off-site monitoring within the framework of the payment infrastructure oversight function and came into force on March 25, 2024.
Violators are obliged to pay the fine within five business days from the date of receipt of the relevant decision of the regulator.
Ap. mi. Finance, Hertz, NATIONAL BANK, NBU, TASCOMBANK, UKRAINE
Net sales of dollars by the National Bank of Ukraine (NBU) increased from $262.6 million last week to $680.4 million this week, which is in line with the figures at the very beginning of the year, according to the regulator.
According to the data, sales of foreign currency increased from $263.0 million to $680.9 million, while purchases remained at a meager level, although they increased slightly – from $0.37 million to $0.46 million.
The official hryvnia exchange rate weakened by almost 11 kopecks over the week, from 38.7998 UAH/$1 to 38.9075 UAH/$1. According to the regulator, the exchange rate declined in the first half of the week, reaching a historic low of 39.1399 UAH/$1 on Wednesday, after which it strengthened by 21 kopecks on Thursday and then by another 2 kopecks on Friday.
On the cash market, the hryvnia exchange rate weakened by 29 kopecks over the week. Unlike the interbank market, after strengthening from 39.31 UAH/$1 to 39.16 UAH/$1 on Thursday, it fell back to 39.30 UAH/$1 on Friday.
The dynamics of the negative balance between the volume of purchases and sales of foreign currency by the population corresponded to the fluctuations of the hryvnia at that time: from $15.4 million on Monday, it rose to $20.7 million on Wednesday.
As reported, on March 20, Ukraine received the first tranche of EUR4.5 billion from the EU under the Ukraine Facility program and $1.5 billion from Canada, while before that, all external revenues amounted to only $1.2 billion since the beginning of the year. In addition, on Friday night, the IMF Board of Directors approved the disbursement of the fourth tranche of $880 million under the EFF Extended Fund Facility program to Ukraine, which should arrive in two to three days, and on March 22, the budget received $230 million from Japan as part of the World Bank’s agricultural recovery project.
According to the National Bank’s forecasts, Ukraine may receive external financing worth $10 billion or even more from mid-March to the end of April, against the $37.3 billion in the state budget for the whole year.
At the same time, representatives of the National Bank noted at a press conference on March 14 that such irregular external financing would not lead to any shocks in the foreign exchange market.
In February, the NBU’s net sales fell to $1.50 billion from $2.53 billion in January, $3.55 billion in December, and $2.45 billion in November. However, due to low external support, international reserves declined by 3.8%, or $1.47 billion, to $37.05 billion in February after falling by 4.9%, or $1.98 billion in January.
In January, the National Bank lowered its forecast for Ukraine’s international reserves at the end of 2024 to $40.4 billion from $44.7 billion.
