National Bank talked about the level of financial stress in Ukraine


The maximum stress level was seen at the beginning of quarantine – 24 March

The National Bank talked about the level of financial stress: the date of the most acute phase of the crisis was named. Photo: SMB Norge

The National Bank published a weekly review of the banking sector with information on the level of financial stress during the acute phase of the crisis resulting from the coronovirus epidemic.

According to published data, the increase in the financial stress index was short-lived and was largely due to an increase in yields of government securities. The local maximum was recorded on 24 March, after which stress levels are gradually decreasing.

In the first ten days of March there was a break in the growth trend of fixed-period hryvnia and foreign currency deposits. By peak values, the immediate hryvnia funds of the population declined by 2.5%, and the currency (in dollar terms) – by 4.0%. But at the same time, outflow rates were much lower than in the first days of the 2008 and 2014 crises.

In addition, before April 17, the hryvnia fund of the population as a whole increased by 1.4% per week, due to salary payments and other payments to the population. Immediate hryvnia deposits decreased by 0.1%. The Foreign Exchange Fund lost 0.5% during the week under review, but was down from a week earlier (-1.3%).

The decline in popularity of fixed deposits has suspended the tendency to reduce rates on hryvnia deposits. Since the beginning of the year, the value of 3-month hryvnia deposits has decreased more modestly than that of 12-months.

Summary PAYSPACE magazine

Recall that the National Bank of Ukraine recommends that banks refrain from distributing profits to pay dividends no less until October 2020. The letters were sent to Ukrainian financial institutions with the same recommendation of the NBU.

It has been reported that the regulator considers maintaining capital extremely important for banks to sustain the economy amid economic problems caused by the coronovirus epidemic.

Read: National Bank will support quarantine trade: what will change.


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