The money supply has expanded by 5.1% year-to-date to UAH 1044.3 billion, driven by an increase in hryvnia deposits, according to preliminary monetary statistics data for November 2016 .

Over the first eleven months of 2016, the stock of deposits in domestic currency increased by 4.3%.  However, in November, the stock of deposits decreased by 0.3% m-o-m, reflecting heightened exchange rate volatility in the FX market due to high political tension.  These developments also had an impact on the stock of FX deposits (in the dollar equivalent), which declined by 2.1% m-o-m in November, but edged up by 1.4% year-to-date.

In November, banks’ lending activity continued to be affected by  high corporate sector leverage and the need for  restructuring of their loans, which was reflected in a sharp rise in the  stock of domestic currency loans in (by 6.3% m-o-m), in particular an increase in corporate loans by 7.5% m-o-m. An increase in hryvnia loans was partially attributed to the restructuring of debt on FX loans by some banks, with the stock of FX loans declining by 6.0% m-o-m. Therefore, the banks' loan portfolio remained unchanged in November.

At the same time, the stock of hryvnia loans edged up by 18.3% year-to-date, including corporate loans reported a 23.2% increase.  Lower market interest rates have contributed to to the increase in corporate loan portfolio.

Loans to households continued to decrease. Loans to households have declined by 4.1% year-to-date and by 0.3% m-o-m in November.

See the Macroeconomic and Monetary Review (November 2016) for greater details on money market developments which will be published on  29 December 2016.