Beginning 28 December 2015, the National Bank of Ukraine will calculate and publish the Ukrainian index of interbank rates (UIIR) on its website.

The Procedure for Calculating and Publishing the UIIR on the NBU’s Website is approved by NBU Board Resolution No. 860, dated 3 December 2015.

The UIIR shall be calculated daily (at the end of a business day),  based on the information about all loan and deposit agreements denominated in domestic currency concluded by banks in the interbank market of Ukraine. To calculate the UIIR index on a given day,  the NBU will use information that has been provided/registered at the moment of its calculation in:

• the System for the submission by banks of information about agreements on the purchase and sale of credit resources in domestic currency in the interbank credit market of Ukraine (KredInfo2); and
• the System for Confirmation of Deals in the interbank foreign exchange market of Ukraine (Val_Kli system) (with regard to swap transactions involving the purchase of US dollars).

The UIIR shall be calculated for the following interbank agreements: “unsecured loans and deposits” and “swap agreements.”  At the same time, under each category, the UIIR is calculated for agreements with different maturities: overnight, one-week, one-month, and three-months.

Calculation of the UIIR for each period and each category shall be carried out only if throughout a certain business day information has been recorded/registered in the KredInfo2 and Val_Kli systems on at least five agreements with relevant terms and categories under which contractors are from at least three different banks.  To get a more accurate value of the UIIR for each period and each category, 20% of agreements with the highest interest rates of the total amount of agreements and 20% of agreements with the lowest interest rates shall not be included into its calculation. The UIIR shall be calculated based on the remaining agreements as the arithmetic average of its values.

Director of the NBU Open Market Operations Department Serhii Ponomarenko said that the NBU developed the methodology for calculating the UIIR based on the methodology applied by countries with developed financial markets, adding that their methodology has been adapted to suit local contexts. The procedure for calculating the UIIR has been preliminary discussed with heads of treasury departments of the largest banks who have positively assessed this methodology. “The heads of banks’ treasury departments pointed out that the domestic market lacks reliable benchmarks that can be used by banks to develop new products for clients and streamline their internal procedures.  The obvious advantage of our index compared to the currently existing peer indexes, especially those that are used abroad, is that is calculated based on all agreements of all banks.  In other words, it is an all-inclusive index representing the entire banking system, not just part of it,” stated Mr Ponomarenko.

The UIIR for the previous business day shall be published on the NBU’s website by 10.00 a.m. each business day.