The National Bank of Ukraine (NBU), in line with market expectations, raised the discount rate by 1,500 basis points to 25% per annum from the current 10%, which is the highest level since the end of August 2015, according to the NBU website.
The National Bank of Ukraine (NBU) has excluded from the registers three insurers that do not have valid licenses and one insurance broker.
As reported on the website of the regulator, PJSC Insurance Company Ukrainian Financial Alliance, ALC Insurance Company VIP Capital (the licenses of both were canceled on January 21, 2022 at the request of insurers) and PJSC Insurance Company OSTRA were excluded from the State Register of Financial Institutions. ” (licenses canceled on February 9, 2022 as a measure of influence).
In addition, from the State Register of Insurance and Reinsurance Brokers – Subsidiary “SINKO Group (UKRAINE)” on the basis of the submitted application.
IC “Ukrainian Financial Alliance” (Kyiv), registered in 2003, specializes in providing services in the field of risk insurance.
IC “VIP-Capital” (Kyiv) was registered in 2007 and specializes in providing services in the field of risk insurance.
IC “Ostra” (Odessa) is one of the first insurance companies in Ukraine. Established in December 1990 on the basis of the regional representative office of Ingosstrakh Insurance Company (RF) in Ukraine.
The National Bank of Ukraine (NBU) lifted a restriction on May 21 that allowed authorized institutions to sell cash foreign currency to customers with a deviation from the official no more than 10%, the press service of the regulator said on Friday.
Relevant changes were adopted by the NBU Board Resolution №102 of May 20, which was published on the Central Bank’s website and comes into force on May 21.
The document also removes similar restrictions on setting the exchange rate at which banks write off hryvnia funds from customers’ accounts if customers pay with hryvnia cards abroad.
“Removing restrictions on the exchange rates at which banks sell currency to the public will improve the working conditions of legal market participants. This will increase competition, increase liquidity in the legal segment and reduce illegal transactions. All this will make the foreign exchange market more stable and reduce exchange rate amplitude. fluctuations in its cash segment, “the press service of the Deputy Head of the NBU Yuri Geletiy was quoted as saying.
Dynamics of changes in discount rate of NBU
NBU
National bank of Ukraine’s official rates as of 06/05/22
Source: National Bank of Ukraine
The National Bank of Ukraine (NBU) is recording the adaptation and gradual recovery of the economy after its collapse in the first weeks of the war, said Volodymyr Lepushinsky, director of the NBU’s Department of Monetary Policy and Economic Analysis.
“It’s hard for the economy, but it adapts and works. As the main destructive factor – the Russian occupiers – is eliminated, it is recovering. If in March 10 regions and Kyiv were covered by occupation and active hostilities, which produced 55% of GDP, now it is six regions and 20% of GDP, respectively,” he wrote in a column published on the website of the Interfax-Ukraine agency on Friday.
Among the main processes that indicate recovery, Lepushinsky called the almost halving of the number of enterprises that completely stopped their activity – from 32% to 17%, although 60% of enterprises are still operating below the pre-war level of workload.
According to the NBU operational surveys, almost a third of enterprises now do not experience problems with a lack of resources at all, and 48% of those surveyed will have enough available resources for more than a month, thus, compared to March, the share of businesses in which stocks have run out has decreased.
Lepushinsky added that metallurgy is starting to work, mechanical engineering is being activated, the food industry is operating at full capacity in relatively calm regions and is being restored in the liberated territories.
According to him, the labor market is gradually recovering, although the number of job seekers is growing faster than the number of vacancies, which leads to lower wages. “Less wages are an unpleasant consequence of the war. However, now it is important that the labor market is functioning and allows businesses to adapt and find workers,” said the representative of the regulator.
He also pointed out that the National Bank will continue to pause in the publication of the Inflation Report with a macroeconomic forecast until the economic situation normalizes.
“War is almost the only good reason to pause macroeconomic forecasting. Given that additional sources of uncertainty are attached – the duration and consequences of hostilities – it is impossible to make accurate forecasts today,” Lepushinsky explained.
According to him, in order to keep abreast, the NBU has stepped up work on the search and processing of alternative data, as the number of official data has narrowed.
“With the current intensity of events, only the most obvious trends that determine the development of the economy should be determined. After the uncertainty is reduced, forecast scenarios will be “strung” on such trends,” wrote the director of the NBU’s Department of Monetary Policy and Economic Analysis.
He clarified that the National Bank expects that GDP will fall by at least a third this year, and losses could be greater if active hostilities drag on.
One of the reasons for this fall Lepushinsky called the destruction of the most important infrastructure, production, real estate and valuable movable property. According to the latest NBU estimates, the loss of physical capital is about $100 billion, or half of Ukraine’s total GDP for 2021, the column notes.
Among other factors, the author named the lack of internal sources for such a significant increase in capital, although he considers it quite reasonable to hope for external sources both at the expense of confiscated Russian assets and thanks to the support of international organizations, the EU and bilateral assistance from countries.
Lepushinsky pointed out the labor force as another reason, since, according to UN estimates, 5 million people left the country, and at the initial stage of recovery, due to the disruption of communications, the destruction of production and logistics, the demand for labor will be low, which will lead to a high level of unemployment and put pressure on wages.
“However, with the resumption and growth of production capacity, the situation will change: the demand for labor will grow and lead to higher wages. An important role will be played by measures to stimulate the return of migrants to Ukraine, for example, through tax incentives and retraining measures,” the NBU representative said.
