The NBU Board decided to increase the requirements for mandatory reserves of banks to strengthen the money supply.
The required reserve ratios for current accounts in Hryvnia and foreign currency are increased. This was said by the head of the NBU Andriy Pyshny at a briefing.
“Excess liquidity in the banking system reached record levels by the end of the year, slowing the delivery of money from the June increase in the key rate. In particular, the rate of growth of bank rates in the Hryvnia deposits do not meet expectations, due to the continuation of a significant difference between the value of the bank’s liabilities and the return on assets,” he said.
It was noted that in the context of increased inflation and exchange rate expectations, the lack of attractive instruments for hryvnia savings of the population increases the sensitivity of the financial system to situational factors – it creates risk for macro-financial stability, which means that this situation requires additional measures by the NBU to sterilize the excess mass of the Hryvnia, added the regulator.
“Taking this into account, the NBU raises the necessary reserve requirements for current accounts in Hryvnia and in foreign currency by 5 percentage points,” the National Bank said.
At the same time, the NBU will allow banks to cover up to 50% of the total required reserves at the cost of the benchmark-OVDP.
The list of relevant securities to be included in the scope of required reserves will be determined by a separate decision of the National Bank based on the proposals of the Ministry of Finance.
Due to the current procedure, banks will begin to build up the necessary reserves in a new volume, taking into account the possibility of their partial coverage of government bonds from January 11, 2023.
“Such a mechanism will encourage banks to expand the portfolio of domestic government bonds, which will reduce the risk of a return to emission financing of the budget deficit next year. banking system, the National Bank will consider advising additional increase of mandatory reserve ratios,” said the NBU. .
It is assumed that the inclusion of the benchmark-OVDP in the necessary reserves will allow the Ministry of Finance to attract UAH 50 billion.
Recall that the NBU has announced increased pressure on the hryvnia exchange rate.
It has also been reported that Ukraine’s reserves have exceeded pre-war levels.
news Correspondent.net on Telegram. Subscribe to our channel Athletistic
Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.