Ms. Olena Shcherbakova, Director of the NBU General Department of Monetary Policy, has said that low inflation contributes to household income growth.

“Inflation has remained low over a year, currently standing at the level close to zero. In the second quarter of 2012, household income grew by 12 – 13% amid low inflation, compared with 10 % recorded in the first quarter of 2012. Household income growth has a positive impact on household welfare,” says Ms. Olena Shcherbakova.

According to the Director of the NBU General Department of Monetary Policy, an increase in households’ demand for foreign exchange seen in the past two months is a typical situation, which is observed every summer.

“Summer is traditionally a holiday season. During the summer months people buy foreign exchange to go on holiday abroad, which triggers a rise in households’ demand for foreign exchange. There is nothing unusual about this situation. In autumn the foreign exchange market will operate in the ordinary course of business,” she affirms.

Ms. Olena Shcherbakova has added that an increase in household income has resulted in the deposit growth. “The deposit base has expanded by 11% since the start of the year. Owing to the expansion of bank deposit base, the banks’ funding base demonstrates growth, which contributes to the upward trend in the bank deposit portfolio and signifies the growing confidence of households, legal entities and business in the banking system of Ukraine. The banks are ready to resume normal lending activities and operate in the ordinary course of business,” concluded Ms. Olena Shcherbakova.