In April 2017, the money supply expanded by 1.3% to UAH 1,089.0 billion, driven by a increase in cash outside banks (by 3.0%) and the stock of domestic currency deposits (by 1.9% mom), according to preliminary monetary statistics data for April 2017.
In April 2017, hryvnia deposit growth accelerated to 4.1% mom, driven by a combination of factors. First, wages grew at a fast pace, underpinning deposit growth. Second, deposit products offered by banks remain attractive amid expectations that banks will further decrease interest rates on borrowed funds and an appreciation trend in the FX market. Meanwhile, corporate deposit portfolio remained unchanged. In April 2017, the stock of corporate and retail deposits in domestic currency increased by 1.9% mom.
The stock of corporate and retail deposits in foreign currency (in dollar terms) grew by 0.8% mom, driven by a rise in corporate deposits (by 1.7% mom), mainly due to substantial FX revenues, as well as an increase in household deposits (by 0.3% mom).
In April, lennding activity remained subdued. In April, the stock of domestic currency loans to households increased by 0.3%, while those in foreign currency (in dollar terms) decreased by 0.1%. A slight rise in the stock of domestic currency corporate loans (by 0.4% mom) continued to reflect the growing need of enterprises in current assets. The stock of domestic currency loans to households remained at the level of the previous month.
In April 2017, interest rates on corporate loans in domestic currency continued to decline, albeit at a slower pace. In April, interest rates on corporate loans in domestic currency went down by 0.5 percentage points mom and by 2.4 percentage points ytd 14.3%.
See the Macroeconomic and Monetary Review (May 2017) for greater details on money market developments in April 2017.