In June, the money supply expanded by 1.3%  to UAH 1,103.1 billion, driven by a increase in cash outside banks (by 2.4%) and the stock of domestic currency deposits  (by 2.0% mom), according to preliminary monetary statistics data for June 2017.

In June, the bank’s loan portfolio in domestic currency increased by 1.8% mom. The stock of corporate loans in domestic currency increased by 1.9% mom, while that of retail loans went up by 1.3% mom.

Meanwhile, businesses and households continued to reduce debts on FX loans, with the stock of these loans (in US dollar equivalent) having decreased by 1.1% mom.

As a result of this, as well as due to due to revaluation prompted by a further strengthening of the hryvnia against the US dollar, the stock of loans to the corporate sector and households remained virtually unchanged in June.

The stock of deposits in both domestic and foreign currency  (in US dollar equivalent) rebounded in June.

In June, the hryvnia deposit portfolio rose by 2.0% mom, with corporate deposits  increasing by 0.8% and retail deposits up by 3.3%. Meanwhile, corporate and retail deposits in foreign currency (in the dollar equivalent) increased  by 0.7% mom and by 0.3% mom, respectively.

In June, interest rates on corporate loans continued to trend downwards. In particular, interest rates on corporate loans in domestic currency went down by 1 percentage point mom and by 3.6 percentage points year-to-date, bringing the annual growth rate down to 13.1%. In June, a downward trend was underpinned by the NBU’s easing of monetary policy in April-May 2017. 

Also, interest rate on corporate loans in domestic currency went down by 0.5 percentage points mom and by 2.8 percentage points year-to-date, bringing the annual growth rate down to 8.1%. In June, interest rates on retail deposits remained virtually unchanged.

See the Macroeconomic and Monetary Review (July 2017) for greater details on money market developments in June 2017.