Ukraine’s Finance Minister Sergii Marchenko has signed a EUR50 million grant agreement with the German state development bank KfW to compensate for the interest rate costs for small and medium-sized businesses under the state program “Affordable Loans 5-7-9%,” the ministry’s press service said on Thursday.
“The funds will be used to refinance the costs of the Affordable Loans 5-7-9% program, which will allow small and medium-sized businesses to continue to have access to preferential lending,” Marchenko said and expressed gratitude to the German government for its cooperation and systemic support of Ukraine.
He emphasized that the allocated EUR 50 million will make a significant contribution to the improvement of existing business financial support programs.
The Minister also noted that the Entrepreneurship Development Fund (EDF) is a key institution of affordable financing for Ukrainian business aimed at restoring and developing entrepreneurship under martial law.
“The German government continues to support the Ukrainian side and facilitates further grants,” said Ulrike Hopp-Nishanka, Head of the Headquarters for Ukraine at the Federal Ministry for Economic Development and Cooperation (BMZ).
She reminded that last year KfW provided EUR 150 million for the 5-7-9 program.
“These funds are an important component of German-Ukrainian development cooperation, the total amount of which in 2023 alone was more than EUR 600 million,” Hopp-Nishanka said.
The state-owned Ukrgasbank (Kyiv) repaid ahead of schedule UAH 1 billion of refinancing received from the National Bank of Ukraine (NBU) this year, the bank’s press service reported on Tuesday.
“On August 30, the state-owned Ukrgasbank made an early repayment of a refinancing loan in the amount of UAH 1 billion received from the NBU this year. The repayment was due to the positive dynamics of attracting funds from legal entities and individuals in August this year,” the report says.
JSB “Ukrgasbank” was founded in 1993. The state, represented by the Ministry of Finance, owns 94.94% of the shares of the financial institution.
According to the data of the National Bank of Ukraine, as of July 1, 2022, Ukrgasbank ranked 5th (UAH 139.671 billion) in terms of total assets among 68 banks operating in the country.
The state-owned Oschadbank (Kyiv) on December 18 attracted UAH 8 billion at the tender of the National Bank of Ukraine (NBU) for 90-day refinancing at 6%, according to the NBU’s website on Monday.
According to the NBU, the regulator also satisfied the applications for refinancing the banks Sich (UAH 250 million), Avangard (UAH 50 million) and Concord (UAH 36.6 million).
According to statistics, in general, starting from April 30, 2020, the NBU held 31 auctions for 90-day refinancing for a total amount of about UAH 45.886 billion. The tenders scheduled for June 5, July 10 and September 11 did not take place due to a lack of bids.
In addition, starting from May 8, the National Bank held eight refinancing tenders for a period of one to five years for a total amount of about UAH 48.53 billion.
According to the schedule of tenders published on the NBU’s website, the next refinancing auction for a period of up to 90 days will take place on December 24, for a period of one to five years on January 15, 2021.
The Board of the National Bank of Ukraine has decided to keep its key policy rate at 6% per annum.
The NBU expects inflation, which increased to 3.8% in November, into the target corridor of 5% +/- 1 pp at the end of the year and further growth in consumer prices in the following months, the central bank said on its website on Thursday.
According to the NBU estimates, the quarantine restrictions announced by the government for January 2021 will not have much influence on economic activity, consumer demand, and thus on inflation.
At the same time, balanced monetary and fiscal policies will not only contribute to the resumption of economic growth, but also will maintain inflation at moderate levels.
“Cooperation with the IMF remains fundamental for the recovery of Ukraine’s economy. Financing provided by the IMF and other international partners is crucial for the planned budgetary spending. Without this support, the fiscal impulse required to revive the economy will be much smaller, and the recovery will take longer,” the message reads.
Ukraine’s fulfillment of its obligations under agreements with international lenders will unblock next tranches of official financing. This will reduce interest rates on state borrowing on the domestic and foreign markets.
The NBU added that a rise in coronavirus cases and the imposition of stricter quarantine measures to overcome the pandemic remain the key risks to macrofinancial stability. This could result in gloomier consumer sentiment and subdued domestic demand, which would depress economic activity and restrain inflation.
It is indicated that if a negative pandemic scenario is implemented, which will restrain consumer demand and slow down economic growth in general, the National Bank will be able to provide the economy with an additional monetary impulse.
“Conversely, the materialization of the adverse scenario will restrain consumer demand, slowing overall economic growth. Under such conditions, inflationary pressures will be weaker, enabling the NBU to give the economy additional monetary impetus for growth,” the release says.
A summary of the discussion by Monetary Policy Committee members that preceded the approval of this decision will be published on 21 December 2020. The next monetary policy meeting of the NBU Board will be held on 21 January 2021, according to the confirmed and published schedule, the regulator reminds.
The Board of the National Bank of Ukraine (NBU) has retained the refinancing rate at 6%, the central bank said on Thursday.
“The Board of the NBU has decided to keep the refinancing rate unchanged at 6% per annum. On the one hand, it will keep prices from growing under conditions of economic recovery in 2021-2022, and on the other hand it will leave enough space for further decrease in cost of loans to the individual character level,” it said.
According to the statement, the central bank revised its forecast for refinancing rate for 2020 from 7% to 6% per annum with its further growth to 6.5% in 2021.
PrivatBank (Kyiv) has issued the first refinancing loan under the Affordable Loans 5-7-9% program at 0% per annum until the end of March 2021, the Ministry of Economic Development, Trade and Agriculture said on its website on Tuesday, June 9.
“Under the Affordable loans 5-7-9% updated program, state-owned PrivatBank refinanced a loan to an entrepreneur in the amount of UAH 1.1 million at 0% until the end of March 2021. Partner banks continue to accept applications for new program tools, which were introduced by the government during lockdown measures,” the ministry said in the press release.
However, the demand for loans under such conditions amounted to about UAH 390 million over a week, the Economy Ministry said.
Applications for participation in the program from Credit Agricole Bank and Agroprosperis Bank are being considered, the ministry said.
