In September 2017, the money supply expanded by 1.7% to UAH 1,123.3 billion, driven by an increase in deposits (by 2.6% mom). This is shown by preliminary Monetary Statistics data for September 2017.

In September, for the fourth month in succession, the banking system has been continuing to expand the loan portfolio in the domestic currency – it increased by 1.4% mom. This was at the expense of the loans provided to both corporate sector and households.

Balances of corporate loans in hryvnias increased by 1.4% mom, while those of retail loans went up by 1.5% mom. At the same time, balances of FX loans (in the dollar equivalent) decreased.

In September, the banks' deposit portfolio increased in both domestic and foreign currencies (in the dollar equivalent).

An increase in balances of the domestic currency deposits (by 1.1% mom) was primarily caused by the growth in retail deposits (by 1.6% mom). According to the September results, corporate deposits in the domestic currency went up by 0.7%.

At the same time, an increase in the foreign currency deposits (in the dollar equivalent), by 0.8% mom, was largely caused by the growth in corporate deposits (by 1.9% mom).

In September, costs of bank loans in the national currency were slightly raised. According to the month's results, their costs for business and households went up by 0.6 pp and 1.3 pp, respectively.  Instead, the cost of new corporate loans in the foreign currency fell by 0.5 pp.

The costs of some corporate and retail deposits kept on decreasing moderately. Particularly, in September, a sizable reduction was seen in the interest rate on retail deposits in the domestic currency (by 0.8 pp to 10.6%) and in that on corporate deposits in the foreign currency (by 0.7 pp to 1.9%).

See the Macroeconomic and Monetary Review (October 2017) for more details on money market developments in September 2017.