In July, the monetary base had expanded by 1.1 % (by 9.2% ytd) to UAH 278.9bn. The money supply had grown by 1.7 % m/m (by 10.0% ytd) to UAH 850.3 bn, the National Bank of Ukraine (NBU) has reported.

In July, the money market saw a continuation of an upward trend in the outstanding amounts of deposits and loans. This was accompanied by a simultaneous decline in interest rates on deposits in the national currency amid a slight rise in interest rates on loans in the national currency. In July, the amount of cash in circulation outside banks had increased by 2.0 % (by 10.4% ytd) to UAH 224.4 bn.  

In spite of a 0.4% decrease in the banks’ correspondent accounts in July, they grew by 4.9% ytd and reached UAH 25.9bn, with the average daily balance of banks’ correspondent accounts (UAH 26.9bn) being 1.5 times as much as in the corresponding month of 2012. As of 1 August 2013, the banks’ required reserves compliant with the applicable norms amounted to UAH 24.5bn, of which UAH 5.1bn was transferred to the separate account with the National Bank of Ukraine.

The amount of Government’s funds in the national currency held on accounts with the NBU rose by 4.5% m/m (up 8.2 times ytd), reaching UAH 3.9bn.

In July, the central bank carried out refinancing transactions worth UAH 4.5bn (from the start of the year – UAH 20.0bn), with an average weighted interest rate standing at 7.10 % per annum (from the start of the year –7.64 %). At the same time, the fund-raising transactions conducted by the NBU amounted to UAH 28.6bn, with an average weighted interest rate at 1.38 % (from the start of the year – UAH 100.6bn and 2.20% respectively).

In 2013, the FinMin has issued Treasury bills worth UAH 8.0bn with an average weighted yield of 14.30% per annum to increase the authorized capital of Naftogaz.

Domestic government loan bonds were redeemed and interest on them was paid out in timely fashion and in full. Since the beginning of the year, UAH 31.5bn has been paid out on domestic government loan bonds, including UAH 19.9bn in principal debt and UAH 11.6bn in interest.

The NBU plans growth of monetary base in Ukraine in 2013 to amount to 6-8% depending on the scenario of economic development. The government's forecast for macroeconomic indicators contains two scenarios. Under the first, optimistic scenario, the growth of the monetary base in 2013 could be 8%. If the macroeconomic situation develops according to the second pessimistic scenario, there is reason to forecast that the growth of the monetary base will be 6%.