January 21, 2020 | Cbonds
|Last week, banking-sector liquidity set a new record high, reaching UAH234.9bn. This was the result of active VAT refunds, partially postponed from last December. This week, liquidity can slightly decline as it will depend on hard currency purchases by the NBU and month-end tax payments that started this week.|
During December, the government paid just UAH9.8bn in VAT refunds, less than in previous months. But this year, during the first two weeks of January, VAT refunds amounted to UAH6.5bn. According to Treasury data, a large part of last week's VAT refunds were approved last October and November, but were not paid.
Such large payments increased the positive impact of Treasury operations this year to UAH12.7bn, and last week's inflow amounted to UAH6.5bn. Additional funds were injected by the NBU by purchasing US$100m from the market, and UAH0.5bn of liquidity increase was provided by cash exchange in reserves.
So, last week, liquidity rose to UAH234.9bn, including UAH174.7bn of NBU CDs, where UAH125bn of CDs have 14-day maturities.
ICU view: This week, we expect the net impact of Treasury operations will be negative, as there will be bond purchases and month-end tax payments. This impact can be partially compensated by the NBU through purchases of additional hard currencies in the FX market.
|Full company name||ICU|
|Country of risk||Ukraine|