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ICU Research: Treasury of Ukraine and NBU support liquidity

August 13, 2019 | Cbonds

Last week, banking-sector liquidity returned to above UAH100bn (US$4bn) due to inflows from the budget and the NBU. Most likely, this increase will be short-term, and this week we expect a decline due to quarterly income-tax payments.

Last week, the NBU actively purchased FX from the market, providing UAH4bn (US$0.16bn) of local-currency liquidity, and UAH3bn (US$0.12bn) was received from non-monetary operations. The Treasury provided UAH7.5bn (US$0.3nbn) of funds via budget expenditures, but UAH4.6bn (US$0.18bn) of reserves were exchanged in cash.

ICU view: Quarterly income-tax payments will be paid during the second ten days of August, which usually have a negative impact on liquidity in the banking system. We expect that these payments will exceed budget expenditures, especially due to the low amount of debt repayments this week. These cash-flows will have a negative impact on liquidity, moving it down below UAH100bn (US$4bn). Support can come from the NBU via the FX market where FX can be sold by foreign investors for purchases of new bills and by exporters to pay income tax.

Company: ICU

Full company nameICU
Country of riskUkraine
IndustryFinancial institutions


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