The number of banks expecting an increase in the volume of their loan portfolio over the next 12 months amounted to 88% for the corporate segment and 79% for lending to the population, according to the results of a survey conducted by the National Bank of Ukraine (NBU) on the conditions of bank lending.
“In the next 12 months, 79% of respondents predict an increase in the loan portfolio of households, 88% – corporate portfolios. The share of banks that expect an increase in the loan portfolio of enterprises is the largest in the entire history of observation. 67% of financial institutions predict an increase in funding due to an increase in funds of both population and corporations,” the central bank said in a review on its website on Friday.
In addition, in the second quarter, half of the respondents noted an increase in demand for both consumer lending and mortgages.
In the second quarter, survey participants noted a moderate increase in liquidity risk, credit and interest rate risks, while in the next three months banks expect further growth in credit risk, simultaneously with a decrease in interest rate risk and liquidity risk.
More than 80% of banks consider the total debt burden to be medium, in addition, for large enterprises it is higher when compared with SMEs.
In the next quarter, financial institutions forecast the largest easing of hryvnia business lending standards since 2013. In particular, in mortgage loans, due to positive expectations of the prospects for the real estate market, and in consumer loans due to positive expectations of consumer solvency and general economic activity, as well as competition with other banks and nonbank financial institutions.
The National Bank of Ukraine (NBU) has revised its 2021 inflation forecast from 8% (in its April forecast) to 9.6%, and expects that inflation will return to 5% in H2 2022.
“With global prices surging and demand recovering further, the NBU has revised its 2021 inflation forecast from 8% to 9.6%. After peaking in the fall of this year, inflation will begin to slow as the new harvest arrives and global energy prices adjust… inflation in H2 2022 will decline to its 5% target and remain there going forward,” the NBU said on its website on Thursday.
Inflation will soon rise to slightly above 10%, but it will weaken at the end of 2021 and return to its 5% ± 1 pp target range in H2 2022.
The rise in inflationary pressure, including its fundamental component, is also driven by the dynamic recovery of the economy, as evidenced by monthly and other high-frequency indicators. By tightening its monetary policy, in particular through raising its key policy rate and rolling back its emergency monetary measures, the NBU will also keep inflation expectations under control and gradually reduce underlying inflationary pressures.
DYNAMICS OF CHANGES IN DISCOUNT RATE OF NBU
DYNAMICS OF CHANGES IN DISCOUNT RATE OF NBU
The net supply of foreign currency from the Ukrainian population since the beginning of the year amounted to $1.6 billion, Head of the Council of the National Bank of Ukraine (NBU) Bohdan Danylyshyn has said.
“In the segment of foreign exchange transactions of individuals, the supply of foreign currency continues to prevail over demand. In particular, since the beginning of June, the net sale of foreign currency by individuals (in cash and non-cash form) has exceeded $300 million, and since the beginning of the year amounted to almost $1.6 billion,” he wrote on Facebook.
As reported, the net supply of foreign currency by the population of Ukraine in March amounted to $182 million, and in April – $422 million.
The Council of the National Bank of Ukraine (NBU) at a meeting on June 23 called on the NBU Board and the Cabinet of Ministers to speed up the drafting of bills on the regulation of cryptocurrencies, NBU Council Head Bohdan Danylyshyn has said.
“The NBU Council, in particular, decided to approve the recommendations […] to the NBU Board and the Cabinet of Ministers in order to minimize the risks of macro-financial stability in connection with the spread of transactions with virtual assets, and to accelerate the preparation of legislative acts on the regulation of the market of virtual assets and transactions with them,” the head of the Council wrote on Facebook on Wednesday.
According to Danylyshyn, the Council also recommended the NBU Board to analyze the impact of the spread of transactions with virtual assets on the activities of central banks, in particular, on the monetary and financial stability polices, the development of payment technologies and the emergence of new regulatory processes (RegTech).
