March 20, 2019 | Cbonds
|Banking-sector liquidity was slightly volatile at around UAH100bn last week, with one day below this level. This week, we do not expect significant volatility.|
Last week, liquidity was mostly steady and outflows to NBU via the FX market were compensated by budget expenditures. The largest outflow was seen on Wednesday when there was FX selling from reserves, which was increased by outflows to the budget via bond purchases, causing liquidity to decline to UAH98.3bn. By Friday, liquidity recovered to UAH101.5bn.
The NBU absorbed UAH2.5bn last week via the FX market, while banks exchanged UAH1.9bn of reserves in cash. These outflows were compensated by the Treasury with net inflows at UAH6.9bn last week, despite banks repaying loans to the NBU.
ICU view: This week, we do not anticipate significant impact from the FX market on liquidity, or outflows to the budget. However, the government may raise VAT refunds, which in this case would cause tangible liquidity inflows.
|Full company name||The National Bank of Ukraine|
|Country of risk||Ukraine|