The credibility of the hryvnia increases

This year, Ukrainians entrusted banking system more of their money than in the last year. For 8 months of the current year, the total amount of deposits in banks grew by 10.8%, or 61 billion hryvnias. This is almost twice as much as that in the same period of the last year, when deposits in banks increased by 6.7%.

It is worth noting a good trend for the development of national economy and stability of the national currency – the increase of total deposits mainly occurs in hryvnias. For 8 months of the current year, deposits in local currency have increased by 62.2 billion hryvnias, or 19.5%. Meanwhile, foreign currency deposits have declined by 0.5%, or 1.2 billion hryvnias.    

The credibility of the hryvnia is formed by the appropriate monetary policy of the National Bank of Ukraine, which is aimed at ensuring the stability of the national currency. Last month, they stimulated banks to raise funds mainly in local currency, including the requirement for banks to increase the amount of reserve funds for deposits in foreign currency.

Thus, the volume of investments in banks and hence their resource base increases. This, incidentally, lowers the cost of borrowed funds, ie lowers interest rates across the banking system. There is statistical evidence: in 8 months of this year, the average interest rate on bank loans in national currency has decreased from 17.6% to 15% per annum. The National Bank of Ukraine state that they will continue to work to lower cost of resources.

Interest rates on deposits are attractive for savings. The rates on deposits in hryvnia are higher than those on deposits in foreign currency. While the average interest rate on deposits in national currency in August was 9.8%, the rate on deposits in foreign currency was only 5.8%.

Thus, according to statistics and trends, it is time to invest in the stable hryvnia, the credibility of which is strengthening with every month.

Source – National Bank of Ukraine