Excess funds in the banking system of Ukraine, which appeared against the backdrop of the war, creates risks for the Hryvnia exchange rate.
The Ukrainian economy has a huge liquidity surplus caused by the financing of the war budget. Excess funds in the banking system threaten the stability of the exchange rate, said the head of the National Bank, Andriy Pyshny, in an interview with Lb.ua, published on February 9.
“Only the NBU printed 400 billion hryvnias for the budget last year. And all this liquidity is now creating an overhang that threatens the stability of the exchange rate,” he said.
According to Pyshny, it is important to tie up these funds and control their movement by offering an attractive interest rate to savers. And one of these instruments is term deposits.
“In the absence of administrative restrictions due to a certain psychological factor, people may immediately want to withdraw money, and they will go to the foreign exchange market. In the conditions when there is a war, when there is a loss us by 30% of GDP, when export opportunities significantly weaken, when we hold our foreign exchange reserves due to the inflow of funds from international partners, a large liquidity surplus is a very dangerous thing.
Under such conditions, the National Bank is interested in banks that make an adequate offer for placing deposits.
“I want to convey an important message from the NBU and I am sure that all the banks will hear us. It is not that the banks will receive large profits in a non-market way and at the same time do not offer sufficiently high rates on deposits. The National Bank is taking quite strict measures for this, “- said Fluffy.
Recall that at the end of January the National Bank kept the discount rate at the level of 25% per annum and worsened the forecast for GDP growth.
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.